Beginning in 2010 the mortgage lending industry received a new Good Faith Estimate (GFE) and HUD-1 Settlement Statement designed to protect borrowers from unscrupulous lenders and mostly mortgage brokers. The idea was to provide more transparency in mortgage lending. Instead it created a lopsided playing field resulting in mortgage brokers being required by law to give all of their yield commission back to the customer and allowing banks and lenders to keep theirs a secret.

Oddly enough the result of forcing the broker to return all of their yield commission to the borrower has turned out to be a blessing in disguise because the broker now handily presents a better offer in many cases. In the end the new GFE does not protect the borrower from banks who “jack the interest rate” to make more premium.

The Mortgage Bankers Association application survey covers over 50% of all US residential mortgage loan applications taken by mortgage bankers, commercial banks, and thrifts. The data gives economists a look into consumer demand for mortgage loans. In a low mortgage rate environment, a trend of increasing refinance applications implies consumers are seeking out a lower monthly payment which can increase disposable income and consumer spending (or give consumers a chance to pay down other debts like credit cards). A falling trend of purchase applications indicates a decline in home buying interest, a negative for the housing industry and the economy as a whole.

Posted via web from Title Insurance
Continuing Ed for Title Agents

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HUD Asks for Public Comment on RESPA Rules Regarding Affiliated Business Arrangements

June 7, 2010 admin

SUMMARY: Through this Advance Notice of Proposed Rulemaking (ANPR), HUD commences the process of initiating rulemaking directed to strengthening and clarifying the prohibition against the “required use” of affiliated settlement service providers in residential mortgage transactions under section 8 of RESPA. HUD has received complaints that some homebuyers are committing to use a builder’s affiliated mortgage lender in exchange for construction discounts or discounted upgrades, without sufficient time to research their contracts or to comparison shop. The purpose of this ANPR is to solicit information that can be used to inform any future revision or clarification of the regulatory definition of the “required use” of affiliated settlement service providers in residential mortgage transactions.

via sourceoftitle.com

Here is your chance to be heard on Affiliated Business Arrangements

Posted via web from Title Insurance
Continuing Ed for Title Agents