The following components of the new Real Estate Settlement Procedures Act (RESPA) Rule went in effect on Friday, January 1, 2010:
- Good Faith Estimate: The new three page GFE, including disclosure of yield spread premiums and the tolerance restrictions, must be used.
- HUD-1: The new HUD-1 Settlement Statement has been expanded to three pages. It has been redesigned to look like GFE with additional cross references and a "cross-walk" chart comparing charges in the GFE with the final charges.
- 30-Day Cure Period: Loan originators will have 30 days from the date of settlement to reimburse the borrower for tolerance violations.
- Tolerance limitations on settlement charges: Certain services packaged by lenders will be granted a 10% change tolerance.
- Application Process: Lenders will have a one-stage application process with greater flexibility on selecting underwriting criteria.
The Special Information Booklet which mortgage brokers and/or lenders must give borrowers when applying for a mortgage loan has also been updated. This booklet contains consumer information regarding various real estate settlement services, and is required for purchase transactions only.
For more information, please see HUD's website.