Summary
Brian Montgomery, HUD's Assistant secretary for Housing, added, "It's not right that millions of consumers go to the settlement table without fully understanding the mountain of paperwork they're asked to sign and, on top ofthat, expected to pay thousands of dollars in closing costs for services they've never heard of. This new Good Faith Esti- ' mate will give families the tools they need to understand what they're getting into before they sign on the dotted line."
The proposed Good Faith Estimate would consolidate closing costs into major categories to prevent "junk fees" and display total estimated settlement charges prominently on the first page so the consumer can easily compare loan offers. In addition, HUD's new proposed rule would specify the charges that can and cannot change at settlement. If a fee changes, HUD proposes to limit the amount it can change. HUD also proposes to modify the HUD-1 settlement statement to help consumers compare the anticipated charges on the Good Faith Estimate and their actual charges.HUD will seek the authority to impose penalties for violations of specific sections of RESPA, including section 4 (provision of uniform settlement statement); section 5 (GFE and settlement costs booklet); section 6 (loan servicing); section 8 (prohibition against kickbacks, referral fees, and unearned fees); section 9 (title insurance); and portions of section 10 (regarding escrow accounts). In addition, HUD proposes the authority for the secretary and State regulators to seek injunctive and equitable relief for violations of RESPA; require delivery of the HUD-1 to the borrower three days prior to closing; and establish a uniform statute of limitations applicable to governmental and private actions under RESPA.See the full content of this document
Extract
Hud Proposes Mortgage Reform
In an effort to significantly improve the complicated, unclear and costly homebuying process, U.S. Housing and Urban Development secretary Alphonso Jackson recently proposed mortgage reform designed to help consumers better understand their loan terms so that they can shop more effectively f...
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