New HUD Settlement Statement Requirements effective 1/1/10 to result in many Closing Delays

As a continuing wave effect of Fall '09, Department of Housing and Urban Development (HUD) has made changes to the Settlement Guidelines and RESPA that has potential to slow down closing process, and buyers can start seeing closing delays of a week or more, if the Good Faith Estimate lenders send out prior to closing, is off more than 10%, and all notification and paperwork must be done VIA Snail Mail (US Post Office) regular delivery! How http://tinyurl.com/yb8u8mm.

Check out more from the HUD website: http://tinyurl.com/y9evruz

From HUD Web Site: On January 1, 2010, HUD will require that lenders and mortgage brokers provide consumers with a standard Good Faith Estimate (GFE) . This form must clearly discloses loan terms and closing costs. According to HUD, closing agents will also be required to provide borrowers a new HUD-1 Settlement Statement . This statement must clearly compare consumers' final and estimated costs.

According to HUD, he new RESPA rule became effective on January 16, 2009, but provided a one-year transition period for the mortgage industry to incorporate these changes. They said HUD will continue to work with the public. HUD said this includes providing a comprehensive set of frequently asked questions (FAQs) on its website.

Suggest you contact your lender, and don't expect him/her to be up to speed on this. You may know more about this important change than your lender does.

There is now a real challenge for Realtors. If the HUD figures are off more than 10%, and the requirement is that notifications must be via USPO (Snail Mail: The FED is trying to Slooooow down the process, give time for buyer to make sure he/she knows details and has time to find them out. No last minute changes as interest rates go up 1/2 of 1% or more at closing, or lender has suddenly included $1,000 in additional changes that 'just came up'...)

Seven Day Delays can adversly effect Domino closings, and most any closing where the buyer and seller's expections are to move out on a date certain. Bottom Line here is, if lender makes a math mistake or overstatement, then your closing will probably be delayed a minimum of 7 days, and maybe more. This is bound to frustrate realtors in this economy more than even on this type of change. Suggest today, more than ever, your mortgage contacts and those contacts of the buyer be more well infomed, and be a detail person to avoid those 7, 10, 14 day delays, and buyers and sellers who are unhappy, and looking all over the room for persons to blame. Can't you just hear it? "Well, you told me to use this lender, now who's going to pay for my increased expense since I can't move in for 9 more days? Hummm" And the Seller..."what do you mean I can't get my check today? I'm leaving town for Alaska tomorrow, and must those funds for my plane ticket! You all better get your heads together and get me my money, or I'm calling my attorny friend, Matt!"

Good luck to all of us! This is bound to be a continued hot topic when ever Realtors get together.