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Essential Insights on the Final RESPA Rule: Understanding GFE and HUD-1 Settlement Statement

This comprehensive overview of the Final RESPA Rule details important dates, the Good Faith Estimate (GFE), and the HUD-1 Settlement Statement. It covers loan summaries, escrow account information, tolerances for charges, and the right to cure errors. Essential average charge calculations and compliance requirements for lenders are also included. This guide aims to enhance understanding of real estate settlement processes and ensure informed decision-making for borrowers and lenders alike.

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Essential Insights on the Final RESPA Rule: Understanding GFE and HUD-1 Settlement Statement

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Presentation Transcript

  1. The Final RESPA Rule

  2. GFE Page 1 2

  3. Important Dates 3

  4. Summary of your loan 4

  5. Escrow account information 5

  6. GFE Page 2 6

  7. 7

  8. 8

  9. 9

  10. GFE Page 3 12

  11. HUD-1 Settlement Statement 13

  12. HUD-1 Page 2 14

  13. 15

  14. 16

  15. 17

  16. 18

  17. 19

  18. 20

  19. 21

  20. 22

  21. HUD-1, page 3 23

  22. Comparison Chart 24

  23. Charges That Cannot Increase 25

  24. 10% Tolerance 26

  25. Charges That Can Change 27

  26. Loan Terms 28

  27. 29

  28. 30

  29. Right-to-cure Inadvertent or technical errors not a violation of RESPA Section 4 IF revised HUD-1 is provided within 30 calendar days after settlement 32

  30. Average Charge 33

  31. Average Charge • calculations based on specific • class of transactions • during a specific time period • - not less than 30 days • - not more than 6 months • for a specific geographical area 34

  32. Average Charge • charge may not exceed • average calculation • charge may not exceed TOTAL • price paid to 3rd party provider • originator must retain all • documentation determining • accuracy of pricing method for • at least 3 years 35

  33. Average Charge • may not average on charges based • on loan amount or property value • (e.g. transfer taxes, interest charges, • escrow reserves & all insurances • including title insurance) 36

  34. Miscellaneous • revised the required use definition • revised the Servicing Disclosure • Statement • eliminated 1% cap on FHA origination • fees (2.5% - new construction) • updated reserve/escrow account • language • allowed for ESIGN applicability 37

  35. Department of Housing and Urban Development Office of RESPA & Interstate Land Sales 451 7th Street SW, Room 9154 Washington DC 20410 (202) 708-0502 hsg-respa@hud.gov www.hud.gov/respa 38

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