New RESPA Reform rules are just around the corner!

New RESPA Reform rules are just around the corner!

The new RESPA rules, enacted by HUD, are designed to help protect the borrower by standardizing the industry and by improving the borrower's understanding of the loans and all the terms associated with the loans. All brokers and lenders will be required to provide the consumer with a GFE and a HUD-1 with a more thorough eplanation of terms and charges. They will also have to provide a side by side chart to help the borrower compare estimated fees and settlement charges which will be set within tolerance limits.The new rules will be effective January 2010.

These new forms should help the borrowers avoid any surprise charges at settlement and shouln't affect how realtors do business.

I've seen the new forms and can tell you they are not perfect (what is?) but they are helpful in providing information to the borrower that will help the borrower make an informed decision about their loan.

In the interest of full disclosure, I thought I'd include some of the terms in my notes above to help simplify my post. ;-)

• RESPA - Real Estate Settlement Proceedures Act
• HUD - US Department of Housing and Urban Development
• GFE - Good Faith Estimate
• HUD-1 - Settlement Statement

Looks like I'll be in a training class soon!