This article is part one of a three part series by Attorney Jamie Feigelson.<\/p>\n
It is widely understood that on January 1, 2010, there will be very big changes to the ways that real estate closings function. The U.S. Department of Housing and Urban Development (HUD) announced in November that it will not enforce for a 120-day period these new, sweeping regulatory changes to the Real Estate Settlement Procedures Act (RESPA). The new regulations will still go into effect on January 1, 2010, but the board overseeing enforcement of these new rules will \u201cexercise restraint in enforcing\u201d them.<\/p>\n
This is very good news for closing attorneys and settlement agents. Our office at Penner Law Firm is equipped to adhere to the new RESPA rules; our technology has been updated for over a month. However, some settlement agents and closing attorneys may need some additional time to fully adjust the new forms and procedures. Having been to a RESPA seminar in early November, I can tell you that these changes will be difficult for some attorneys and closing agents.\u00a0 Attorneys will have to alter the way they prepare HUD statements and fees, including sample HUDs for mortgage brokers and lenders. Banks and closing attorneys will have to work together to ensure all fees have been properly disclosed to a borrower\/buyer on the GFE (good faith estimate). New software will be required for all closing attorneys to comply with the new HUD 3-page requirement. If a GFE (good faith effort<\/em> – get it?) is made by the closing attorney, but the attorney fails to fully comply with the new law, HUD will advise the attorney on how to correct the problem. This could lead to problems for some attorneys in January and February.<\/p>\n But since RESPA says closing attorneys get a 120 day reprieve, why not prepare for the inevitable; when the new rules take effect, Buyers will need some patience in the closing timeline. One of the main changes to RESPA is that when a lender has to make changes to the terms of the loan such as rate, or closing costs, etc they have to reissue the good faith estimate (GFE) and the buyer must take 3 business days to review the new GFE. So if for some reason there was a change at the closing table, the closing would be automatically pushed back 3 days. You can see how this could potentially cause big problems at closing, especially for short sale transactions. Be prepared, Connecticut, for delays in the closing process.<\/strong><\/p>\n Penner Law Firm will not have such problems, as we have already implemented our new software systems for RESPA and HUD statements. But the closing process involves multiple parties, and the 120-day break-in period should assist all parties to ensure a proper closing. In the end, things should work out better for buyers and borrowers, as these changes were made specifically to protect consumers.<\/p>\n The next two blogs will deal with the nuances and changes of the new HUD laws, and the effect it could have on brokers and lenders.<\/p>\n (Stay tuned for Part II of the “Sweeping Changes” series tentatively entitled “The Good, the Bad, and the HUD-ly”)<\/p>\n","protected":false},"excerpt":{"rendered":" This article is part one of a three part series by Attorney Jamie Feigelson. It is widely understood that on January 1, 2010, there will be very big changes to the ways that real estate closings function. The U.S. Department of Housing and Urban Development (HUD) announced in November that it will not enforce for […]<\/p>\n","protected":false},"author":4219,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-218875","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/218875","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/4219"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=218875"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/218875\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=218875"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=218875"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=218875"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}