Archive for Regulations
HUD Settlement Costs Booklet – Revised for 2010
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The Department of Housing and Urban Development (HUD) has revised the “Settlement Costs Booklet“; now entitled “Shopping for Your Home Loan.” The revised booklet is required to be given to every consumer applying for a purchase loan on or after January 01, 2010.
Layout of the Settlement Booklet:
There is a detailed explanation of the new Good Faith Estimate (also required on or after January 01, 2010) and the revised HUD-1 form. The booklet is divided into 13 parts, obviously HUD isn’t superstitious.
Some of the important topics covered:
- A list of milestones on the path to closing your purchase loan.
- A description of the purpose of the booklet.
- Contact Information for HUD as well as other important contacts, a glossary, a consumer bill of rights via a “Do” and “Don’t List”
- The Roles of various entities involved in the mortgage process: Loan Originator, Real Estate Agent, Attorney, Builders.
- A short section, with a worksheet to help determine what you can afford.
- Shopping for the best loan and shopping for other services outside of origination “Other Settlement Services”
- Types of Loans and Programs
- Explanation of the new Good Faith Estimate, and the new HUD-1.
Shopping For Your Home Loan booklet provides consumers with tools they need to make an informed decision about the costs incurred during a mortgage transaction.
*Post updated 02-03-2010 to embed the updated Settlement Cost Booklet that was updated by HUD on 01-06-2010 with corrections for minor detail.
**Post updated 08-19-2010 to embed the updated Settlement Cost Booklet that was updated by HUD on 08-17-2010, HUD did not mention what they have revised.
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Regulation Z Proposed Rule Would Mean More Cash to Close
Posted by: | Comments
The proposed rule revising Regulation Z, specifically Docket Number R-1366, by the Federal Reserve Board would increase the amount of money consumers would need to bring to closing. This increase in cash to close comes from the elimination of Yield Spread Premium, which has long been used to help cover consumers closings costs, or offset the origination fee. The new Good Faith Estimate going into effect January 01, 2010 requires that all Yield Spread Premium be given as a credit to the consumers origination costs.
The comment period for the Proposed Rule is available until December 24, 2009. It is urgent that your voice be heard. You can read the 191 pages describing the proposed rule in the Federal Register at: http://edocket.access.gpo.gov/2009/pdf/E9-18119.pdf
- Eliminates No-Cost Loans. Consumers who already own a home will no longer be able to do No cost or no fee loans. This is significant because many consumers do not have adequate equity in their house, or cash for closing costs. This will prevent consumers from realizing the savings from lower interest rates.
- Less Flexibility. Yield Spread Premium allows for loans to be structured in the best way to benefit the consumer.
- More Cash Will be Needed. Consumers will no longer be able to have a portion of their closing costs paid on purchase through the use of Yield Spread Premium. Thus more consumers will need to wait longer, or forgo altogether, the dream of homeownership, simply from not having enough money for the down payment and closing costs. For those eligible a USDA Home Loan could potentially solve both the down payment and closing cost problem.
- Eliminates Competition. The proposed rule will cause a damage to mortgage brokers, and likely result in a further reduction in the number of mortgage brokers, which would ultimately lead to higher costs through less competition.
How your Voice can be heard on the Proposed Rule revising Regulation Z:
› Web Site: http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm Scroll down to Regulation Z – Truth in Lending – Closed-end Mortgage [R-1366], click on Submit comment on this proposal
› Federal eRulemaking Portal: Change the Select Document Type to Proposed Rule, enter keyword “R-1366″, click Search, Click on the Submit a comment balloon on far right hand side of results, the ID is: FRS-2009-0240-0001
› E-mail: regs.comments@federalreserve.gov Include the docket number: ”Docket Number R-1366″ in the subject line of the message.
› Fax: 202-452-3819 or 202-452-3102
› Mail: Jennifer J. Johnson, Secretary, Board of Governors of the Federal Reserve System, and Constitution Avenue, N.W., Washington, DC 20551
The Easiest way to comment online: http://www.federalreserve.gov/generalinfo/foia/ElectronicCommentForm.cfm?doc_id=R-1366&doc_ver=1&name=Regulation%20Z%20-%20Truth%20in%20Lending%20-%20Closed-end%20Mortgages&date=20090723a
All public comments are available at the Boards web site at: http://www.federalreserve.gov/generalinfo/foia/index.cfm?doc_id=R-1366&doc_ver=1 as submitted, unless modified for technical reasons. This means that the information you submit, including identifying information and contact information will be visible.
I sent in my comments and a proposal. Will you do the same?
