On January 1, 2010 mortgage reforms under the Real Estate Settlement Procedures Act (RESPA) are scheduled to take effect. For the first time in more than 30 years, the United States Housing and Urban Development (HUD) department is updating mortgage rules to help consumers obtain the lowest cost mortgages, avoid costly and potentially harmful loan offers and/or requirements. By promoting comparison shopping, HUD’s final RESPA regulation is estimated to save consumers an average of nearly $700 on their real estate transactions.
The new reforms will, among other things, require that lenders and mortgage brokers provide consumers with a standard Good Faith Estimate (GFE) that clearly discloses key loan terms and closing costs. Closing agents will also be required to provide borrowers a new HUD-1 settlement statement that clearly compares consumers’ final and estimated costs.
