Mortgage professionals will have to get used to a new “Good Faith Estimate” to be disclosed in 2010. The U.S. Department of Housing and Urban Development (HUD) has updated and re-released “Shopping for Your FHA loan: HUD’s Settlement Cost Booklet.” A large share of content in the 49-page publication, which helps consumers comparison-shop mortgages, addresses the standardized Good Faith Estimate (GFE) and HUD-1 settlement statement forms that lenders must start using on Jan. 1, 2010.
HUD estimates that consumers could save almost $700 in costs and fees per mortgage loan on average as a result of the new requirement, which is one of several changes to the Real Estate Settlement Procedures Act (RESPA). In addition to the updated literature, the agency has set up a RESPA “FAQ” section and other information on a dedicated RESPA page so that consumers, settlement service providers and lenders can gain a better understanding of the new rules.
Here is the location of the .pdf of the booklet that you can save or print out for your reference. http://portal.hud.gov/portal/page/portal/HUD/documents/Settlement Booklet December 15 REVISED.pdf
Mortgage lenders are now required to provide loan applicants with the following:
- Good Faith Estimate—provided at the time of application to borrowers to outline the home loan terms and Total settlement costs.
- HUD-1/HUD-1A Settlement Statements—to inform borrowers of final costs at settlement.
- Servicing Disclosure Statement—to inform the borrower whether another financial institution may be servicing their loan.
- Settlement Cost Booklet—provided within three days of application to inform the borrower of fees involved in home purchase settlement.
