The new RESPA reform proposal is now circulating in Washington, and RESPAnews has obtained a handwritten, marked-up version of the new GFE as HUD reportedly has envisioned it. The form is based on the GFE HUD released at the 2005 RESPA roundtables, but with items crossed out and additional disclosure language written in the margins. Sources indicate that this GFE is based on the one HUD submitted to OMB for review. Read on for an exclusive look at the form and HUD's reported comments and changes.
By Robin Wardzala
With the new Real Estate Settlement Procedures Act (RESPA) reform proposal and corresponding disclosures now circulating in Washington, D.C. after being released late last week from the Office of Management and Budget (OMB), industry watchers are keen to get a first look at HUD's new proposal.
Anecdotal and unconfirmed reports from Capitol Hill indicate that HUD has released the reform proposal to members of Congress under strict confidentiality measures, with marks bearing the president's seal and "top secret" warning messages covering the front page of the document.
However, although it appears that the new proposed rule is still being held under lock and key, RESPAnews has recently obtained a handwritten, marked-up version of the new GFE that purports to show the changes as HUD has reportedly envisioned them.
The form is the same four-page GFE that HUD released for comment at the 2005 RESPA roundtables, but with items crossed out and additional disclosure language written in the margins.
New information indicates that this marked-up GFE was developed by the National Association of Realtors (NAR) for discussion with the NAR Business Issues Committee. It has apparently been shared with a few outside industry members as well. The comments on it are based upon a viewing of the "draft GFE 2007" that made the rounds after HUD sent the proposed rule to OMB.
One of the most noticeable changes to HUD's GFE is the fact that all of the loan items were marked to say "intial" loan term instead of just "loan term," possibly to heighten the emphasis to consumers that the numbers could change over time.
The comments also add questions such as "Can your interest rate rise?" "Can your loan balance rise?" and "Can your monthly amount owed for principal interest, and any mortgage insurance rise?" followed by yes or no check boxes. These questions seem geared toward preventing borrowers from being surprised or uninformed about adjustable rate mortgage resets.
As the new RESPA reform rule is expected to be released for public comment by the end of February, it is likely that we will know for sure very soon.