More On: The New Good Faith Estimate & HUD

Below is the link for HUD’s new settlement guide that is for the consumer to better understand the new good faith estimate and HUD that goes into effect on January 1st, 2010.  This will be used for all residential real estate transactions. 

For a quick breakdown there will now be 3 different “buckets” of charges.  The first bucket will be all of the origination fees that go to the lender which are lumped together as one.  These fees cannot change unless the interest rate expires, zero tolerance.

The 2nd bucket is “All Other Settlement Fees” which consist of the Appraisal, Credit Report, Upfront MIP, Flood Cert, and Tax Service Fee.  The Title Services  and lenders title insurance ($25) lumped as one, Owners Title Insurance,  Survey and Pest Inspection, Recording Fees, Intangible Tax and Doc Stamps (goes in the “Transfer Tax” spot, #8).  Numbers 3 to 8 have a 10% tolerance

The 3rd bucket is Numbers 9 to 11 which have an unlimited tolerance and consists of the escrow account, daily interest, and insurance. 

The new GFE will NOT show the borrower how much cash they need for closing. 

The new HUD will show the estimates from the Good Faith Estimate and have a breakdown of how much the figures varied. 

It is very confusing so if you have any questions feel free to email me.