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New GFE  effective January 1, 2010:  

RESPA Reform Changes to the GFE:

  – New GFE required for all applications taken on or after January 1, 2010.

 – GFE must be given within 3 days of receipt of the following application data:   

• SSN
• Borrower’s Name
•  Property address
• Gross monthly income
• Property value
• Loan amount
• Other information required by Lender

– Upfront fees (except credit report) cannot be collected before delivery of the GFE   

– Only one origination charge is disclosed and includes all service charges (charges paid to the lender/broker, including the YSP, and all junk fees lumped into one amount) and the charge or credits for the interest rate chosen is added to or subtracted from the service charge to arrive at one lump origination charge.

-All title charges will be disclosed as one lump title charge.

-Most fees cannot increase after disclosure.  

•  Zero tolerance for the lender’s service charge, charge or credit for the interest rate chosen (after the loan is locked) and transfer charges.
• 10% tolerance for required services selected by the lender, such as appraisals, flood determination, etc., title services and lenders title insurance (unless the provider is selected by the borrower), required services the borrower can shop for (if the borrower uses providers identified by the lender) and optional owner’s title insurance (if the borrower uses providers identified by the lender) and government recording charges.
• Charges that can increase without tolerance are required services the borrower can shop for (if the borrower doesn’t use providers identified by the lender), title services (if the borrower does not use providers identified by the lender), reserve or escrows, interim interest, homeowner’s insurance and optional owner’s title insurance (if borrower doesn’t use provider identified by lender)

– Applicants must be given 10 business days to “accept” the GFE terms, except for interest rate-dependent charges, and the related loan terms.

  – A GFE can only be revised without regard to the tolerances for a “changed circumstance”, borrower requested changes, and in the instance of a home being newly constructed and closing is expected to occur more than 60 days after the GFE is provided. Only the fees associated with the changed circumstance or borrower requested change may be revised.    

RESPA Changes HUD.  New Hud-1 :

- New HUD-1/HUD-1A must be used for applications taken on or after January 1, 2010 or for applications taken prior to January 1, 2010 if the borrower was provided the new GFE form. 

- The new 3 page HUD-1 form will include a comparison of GFE and HUD-1 charges and a synopsis of loan terms.