Line 1101 on the new 2010 HUD-1 is used to record the total for the category of “Title services and lender’s title insurance” The term “title services” includes:

Any service involved in the provision of title insurance, including but not limited to:

• Title examination and evaluation
• Preparation and issuance of commitment
• Clearance of underwriting objections
• Preparation and issuance of policies
• All processing and administrative services required to perform these functions (e.g. document delivery, preparation and copying, wiring, endorsements and notary); and
• The services of conducting a settlement.

Join us for timely and informative discussions pertaining to the 2010 HUD-1 at our new group on LinkedIn.  To access the group, simply click on the link below and log into your LinkedIn account.  Once you become a member of the group, you will be able to follow the discussion groups, add comments and start a discussion of your own. 

The intent of this group is to share pertinent information regarding the upcoming changes to the HUD-1 in a collabrative means. As such, we look forward to having you join this group and sharing your thoughts.

http://www.linkedin.com/groupInvitation?groupID=2241085&sharedKey=101A712BBD36

So your sales contract says that the seller is supposed to a fee however the originator put that fee on the GFE meaning that the borrower is supposed to be paying for it.  Now what?

Since the fee is listed on the GFE it has to be listed on the HUD-1 as a borrower paid fee regardless of what the sales contract says.  Since the seller is supposed to be paying for this fee then you will put a credit on page 1 of the HUD-1 in the 200/500 giving credit back to the borrower.  

HUD has released an update to the FAQ’s as of 9/9/09.  All new information is in bold, you can check it out at: http://www.hud.gov/offices/hsg/ramh/res/resparulefaqs.pdf 

Important information on how to fill out the ‘Can your interest rate change?’ section has been added.

There's a new provision in the final RESPA ruling called the "Tolerance" rule and imposes a liability on the lender for charges incurred during the settlement process.  The intent of this rule is to allow borrowers to receive an accurate Good Faith Estimate (GFE) early in the application process enabling them to effectively shop for settlement services.  The rule does allow the lenders some flexibility for charges that are beyond their control (ie. Government Recording Fees).   

The tolerance rule breaks down settlement service charges into three (3) categories.  The first category are charges that cannot change, (zero tolerance) between the time the GFE was issued and the final HUD-1 is signed at closing.  The second category are charges that in total, can increase by a maximum of 10% (10% tolerance), and the final category are charges that can increase by any amount (no tolerance).

The key thing to remember when it comes tolerances is that the rule only applies if the borrower uses a settlement services provider either chosen or recommended by the lender.  If however, the borrower chooses their own settlement services provider, this rule does not apply.

For detailed information on the tolerance rules and the specific charges within each category, please review the information provided at the ALTA site by using the following link.

http://www.alta.org/respa/08-11-13_RESPAsummary.pdf

You may want to research the terms "inside the column" and "outside the column" - you will be hearing a lot about them soon.

Closing two loans at the same time now requires two separate GFE’s and HUD-1’s.  Each transaction needs to have it’s own set of documents so that the borrower can carefully shop for the best loan.  In preparing the HUD-1’s the principal amount of the second loan must be listed outside the borrower‘s column with a brief explanation on Line 204-209 of the HUD-1 for the primary loan. If the net proceeds of the second loan are less than the principal amount, the net proceeds may be listed on the same line in the borrower‘s column.

Below is an example from HUD on how to disclose the 2nd mortgage loan amount on the 1st mortgage HUD-1.

By proactively working to provide a preliminary HUD-1 with correct fees to your lenders and brokers, you will set the stage for a smoother closing.  This will enable them to issue the TIL and other required disclosers within 6 days of the scheduled closing date, giving adequate time for mailing and borrower review.

If a lender has issued a GFE prior to January 1st, 2010 and the closing will occur after that date, the settlement agent can use the OLD HUD-1 or HUD-1A.  The lender however has the option to re-issue a new GFE (with the same terms and charges) in which case the settlement agent would be required to use the NEW HUD-1 or HUD-1A.

For more information, click on the link below to the New RESPA Rule FAQs

http://www.hud.gov/offices/hsg/ramh/res/faqfinalrev4.pdf

HUD has responded to all of the questions from all of us about RESPA reform.  They have released a 15 page document answering many questions about the new HUD-1 and GFE but many feel they didn't answer enough.  Did they answer your questions?  Take a look at their FAQ page by using the link below.

http://www.hud.gov/offices/hsg/ramh/res/faqfinalrev4.pdf