Happy New Year and good morning!

sim⋅pli⋅fy
/ˈsɪmpləˌfaɪ/ [sim-pluh-fahy]
–verb (used with object), -fied, -fy⋅ing.
to make less complex or complicated; make plainer or easier: to simplify a problem.

Welcome to the first business day of the newest chapter in RESPA “reform”… the introduction of the new and “improved” Good Faith Estimate (GFE), HUD I form and Truth In Lending disclosure. To be honest… through all the webinars, all of the printed material, all of the conference calls and all the flyers we have experienced, there is still a lot of fog surrounding these new documents, what is required and how it will be implemented! It also seems that each lender has their own spin on how the regulation is to be interpreted and what will be required of the broker (and borrower).  Just this past Friday, I received a 62 page training deck to prepare for a 1.5 hour webinar this Tuesday (a day after day one!)

“The proposed Good Faith Estimate (GFE) is lengthy, complex, and cannot be easily compared by a borrower with the HUD-1 Settlement Statement at closing to determine whether the actual costs exceed the estimate provided at the time of the loan application.”

“The proposed GFE contains terminology that conflicts with other disclosures consumers receive under the Truth-in-Lending Act (TILA) and the Equal Credit Opportunity Act (ECOA), which will add to the borrower’s confusion during the loan application process.

“HUD’s proposed new GFE and mortgage application process would overlap and conflict with the broader federal mortgage regulatory framework under TILA and ECOA, which would further add to the borrower’s confusion.” — quote from David Stevens,  current Assistant Secretary for Housing/FHA Commissioner before the U.S. House of Representatives Subcommittee on Oversight and Investigations of the Committee on Financial Services.

I will be doing my best, this week, to gather as much information as I can to relay the concrete aspects of these changes and how they will be affecting borrowers and Realtors.

Suffice to say, at this early date… be prepared for a bit of confusion and, as usual in our industry, changes of this magnitude can potentially result in delays in the processing and closing of loans.

Stay tuned.