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.

A petition containing 117,000+ signatures to end HVCC (Home Value Code of Conduct), is being presented by Brian Stevens and Frank Garay from Think Big Work Small, to  Andrew Cuomo, today in New York.

According to HVCCpetition.com, the signing statistics were as follows:

• 39.6% if the petition signers were mortgage originators
• 29.8% of the petition signers were real estate professionals
• 17.4% of the petition signers indicated they worked in some other facet of the industry
• The  remainder of the petition signers were primarily home owners or potential home buyers

For those unfamiliar with HVCC… this bit of legislation stopped the ability of mortgage brokers to order appraisals from the sources that they are familiar with and put the appraisal process in the hands of the ultimate lender the loan would be placed with.  The HVCC procedure has resulted in appraisal delays and additional costs to the borrower and has all but eliminated the borrower’s ability, without incurring the cost of another appraisal, to have their loan placed at another lender, once the appraisal has been ordered.

Stay tuned for further news on this very important issue affecting the mortgage and real estate industry.

Illinois Home Buyers Take Note… Home buyer Tax Credit Extended and Enhanced!

On November 5, 2009, Congress gave final approval to legislation expanding an $8,000 tax credit for first-time home buyers, and President Obama signed the bill on November 6, 2009!

Highlights:

• The new bill extends, until April 30, the $8,000 tax credit for first-time homebuyers that would otherwise expire at the end of this month.
• The legislation will allow the credit for couples earning up to $225,000 a year and individuals earning up to $125,000. That’s up from the current $75,000 limit for individuals and $150,000 for couples.
• It also will allow home buyers who have owned their prior residence for at least five years to receive a $6,500 credit. Those who sell their new home, or no longer use it as their main residence within three years, would have to repay the credit. Homes worth more than $800,000 wouldn’t be eligible.

This is great news for both first time home buyers and existing home owners who have been thinking about buying rather than just a new mortgage!