The new RESPA rule is AIMED
directly at Mortgage Brokers and will do the following:
 Force
only Mortgage Brokers to credit ALL Yield Spread, Rebate,
and Service Release Premiums to the borrower in escrow
- the Mortgage Broker then must separately charge the
borrower for ANY amount of compensation.
Allows banks, Savings and Loans and Mortgage Bankers
to only show fees they charge such as points and fees
and interest rate but imposes no disclosure requirements
for secondary market gains that they would collect on
the same interest rate as charged by a mortgage broker.
Requires that a good faith estimate be given within
3 days of application and requires that those fees and
interest rate be guaranteed for 30 days. Also requires
that the broker re-discloses if any GFE goes beyond
30 days.
Requires re-disclosure within 3 days if any term deemed
to be material changes prior to the transaction closing.
A
ZERO TOLERANCE POLICY is mandated stating that
it would be illegal for a broker to receive more compensation
than specifically disclosed on the Good Faith Estimate.
In addition there is a zero tolerance for variation
on any broker selected service providers fee. On other
third party charges not picked up by the broker, a 10%
tolerance is allowed, but the broker can be held liable
for any difference above the 10% tolerance. Some fees
subject to the 10% tolerance would be taxes, hazard
insurance, mortgage insurance, etc.
Requires that a “Binding Contractual Good Faith
Estimate” is sent to a borrower based on a telephone
conversation with enough information is given to make
a credit decision. The borrower has a 30 day period
to exercise that Good Faith Estimate/Contract.
The rule also allows for a Safe Harbor to violations
under RESPA Section 8 based on a “Guaranteed Mortgage
Package” - that guarantees the borrower a bundled
package of services that guarantees the interest rate,
and guarantees one total lump sum for fees on the transaction.
The rule would require that in order for a mortgage
broker to participate, a lender would have to sign on
the guarantee/contract. There may also be minimum net
worth requirements set for the Mortgage Brokers to participate
in this option. |
