January 2010

New RESPA Rule – There’s a Gray Area

The new RESPA Rules are underway and real estate professionals are discovering that many questions they have fall into a gray area. Because real estate closings are done differently from region to region in order to comply with individual state laws, there isn’t always one hard and fast rule that works for all while preparing HUD settlement statements.

You’ll find presentation material everywhere, providing advice on settlement statement preparation. Since the announcement of RESPA reform, Easy Soft has been at the forefront of training for real estate professionals.

Because we field questions from thousands of our customers nationwide, we know the wide variety of stumbling blocks you encounter as you begin to implement the new Rule. Through careful research, our experts have formulated answers to help you, no matter where you live.

Easy Soft maintains a FAQ page on our website:

You will find answers for many tricky questions. For example, how to prepare the GFE-HUD comparison sheet, when the title agent is on the lender provided list, but the settlement agent is not (or vice versa!). Read on, and have fun!

Please let me know your thoughts in the comments section below.

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New RESPA Rule – Do we have more disclosure or less?

HUD’s stated objective (well, at least one of the most important ones) with the new RESPA Rule is to bring about much needed transparency in the real estate closing process. While the GFE-HUD comparison sheet requirement certainly has pressed lenders and settlement services providers to quote their fee much more accurately, there is still an element of opacity.

As part of the new rules, lenders and settlement service providers are no longer allowed to itemize “administrative fees.” The rule applies to all settlement service providers, whether they are on the lender provided list or not. Now, in the normal course of business, consumers would want to see an itemized list of charges, especially because the HUD Settlement Statement does not allow for itemization. If the goal is transparency, then breakdown of lender’s origination cost, title fee, closing fee, etc. must be visible.

What’s the solution? We believe we have the answer. Easy HUD software has a “Smart Itemization” feature. You can actually fill-in the itemization instead of entering a “lump-sum” charge on the HUD. And, you can print the itemization sheets separately. So, the bottom line is, HUD forms including the GFE-HUD comparison sheet will get a lump-sum value and yet you can provide clients with a breakdown! Isn’t this cool?

If you are a not a current Easy Soft HUD 3.0 user, see what you are missing. Download a trial copy at: http://www.easysoft-usa.com/hud-software.html

Please let me know your thoughts in the comments section below.

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