This morning I went to a training that Charter Title offered on the new RESPA rules and how they are going to affect our Spring-Tomball buyers and sellers. Chuck Jacobus SVP of Charter Title and a real estate attorney with law offices in Bellaire was the guest speaker.
RESPA came in to affect in 1973 and to begin with Chuck said the restrictions were difficult to comply with. According to Chuck it is déjà vu 1973. We are going through the adaptation phase of the new RESPA rules and most don't understand them (which includes title companies, lenders etc.).
LONG story short both the seller and the buyer are going to have to be patient while we go through the process. He felt that the days of having a loan done in 30 days or shorter are gone. He recommended allowing 60 days for the loan process. He said some lenders will be able to go through the process in a shorter time and he felt the smaller lenders and banks had a better handle on the changes than the big banks did.
The buyer is going to have to be proactive on their loan. I have had buyers who started the loan process and then took a 2 week vacation. He said if the buyer goes on vacation you can just about be assured that the loan will not close on time. He also said the buyer is going to have to realize that they cannot switch loans a week before closing.
As of January 1st2010 lenders are required to use a new good faith estimate (GFE). The new HUD 1 form and the GFE must look exactly alike. All charges must show on the HUD. Chuck was joking and said if you throw a quarter across the closing table it will need to be on the closing statement.
If there are any changed circumstances that will affect the mortgage amount that is on the GFE the lender will have to make changes which will take time. The lender basically has to live with the GFE that they give you when you start the process. However the quoted terms and prices in the GFE are only good for 10 days. The buyer will need to give the go ahead during that 10 day period or the terms may no longer be available. Please note if you don't contact your lender to say go ahead during that 10 day period; the terms can change on the 11th day.
Changed circumstances include:
- Acts of God, war, disaster or other emergency. For those of us in the Spring-Tomball area this would be something like Hurricane Ike.
- Information particular to the borrower or transaction that was relied on in providing the GFE; which may include; information about the credit quality of the borrower (you lost your job), the amount of the loan, the estimated value of the property.
- New information particular to the borrower or transaction that was not relied on in providing the GFE.
- Other circumstances that's particular to the borrower or transaction, including boundary disputes, the need for flood insurance or environmental problems.
When there is a "changed circumstance" the loan originator must issue a revised GFE within three business days of receiving the information to establish the changed circumstance. This goes back to the buyer not going on vacation as then it will be hard for them to deal with the changed circumstance.
All of this came about to keep consumers better informed in response to the predatory lending that happened in the last few years. As always when the government gets involved it can get a bit more complex so both buyers and sellers are going to need to be patient with the process. More than ever it is going to be important that a buyer go to a reputable lender who can get the loan done. If you need the phone number of a good lender please give me a call.
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If you are buying or relocating to Spring Texas or Tomball TX and need help from a professional REALTOR®, Marchel can be reached at Marchel@AgentwithResults.com or by phone at 832-721-8332.
If you would like information about Spring-Tomball TX please visit my websites at www.AgentwithResults.com and at www.ResultsRealtytx.com. The AgentwithResults site is rich in Content about Spring and the surrounding areas of Tomball, The Woodlands and Magnolia. If you prefer pictures with your content then visit my ResultsRealtyTX site.
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Copyright © 2010 Marchel Peterson, All Rights Reserved. *New RESPA Rules - How they affect Spring-Tomball TX buyers and sellers!!*
