Good Faith Estimates and RESPA: Don’t lose sight of the big picture
March 8th, 2010
Written by Greg Frost
Categories: Economy, First-Time Homebuyer, Mortgage Approval Process, Mortgage Guidelines, Real Estate News
The Real Estate Settlement Procedures Act (RESPA) that took effect earlier this year has attracted a lot of attention both from the industry and from borrowers. The act requires that “loan originators provide borrowers with a standard Good Faith Estimate that clearly discloses key loan terms and closing costs and that closing agents provide borrowers with a new HUD-1 settlement statement.”
After several months with the new protocols in place, we have some perspective on the changes. From the buyer’s point of view, the new rules mean a lot more paperwork for a relatively small amount of money, since differences in Good Faith Estimates are rarely significant. And from our perspective, RESPA looks like a Band-Aid solution that doesn’t give buyers credit for their intelligence.
We pride ourselves on following the strictest standards, and we ensure that our people are up on all the latest developments, but we see the chance that too much focus on minutia could make us lose sight of the forest for the trees. Buyers, the details do matter, and you need to get the facts from a reputable broker such as Frost. But fear about relatively small amounts like these shouldn’t keep you from getting on with your lives. And those in the mortgage industry, you need to maintain a focus on what really matters–helping people get the funds they need to make society run, just as our industry has done for most of the last 200 years, by providing sensible, reasonably priced products that fit the need.
If you have any questions at all about what all of this means to you, please contact us today. We’ll be happy to help.
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