HUD Clarifies Listing of Charges
Flat-fee disclosures combined with commissions and listed on the HUD-1 sheet get government approval in an unofficial clarification by the U.S. Department of Housing and Urban Development.
HUD attorney Helen Kanovsky explained the procedures affecting real estate practitioner commissions in a recent letter to one of the lawyers involved in an ongoing class-action lawsuit involving commissions.
Kanovsky said that the commissions and flat fees could be combined on a single line of the HUD-1 settlement sheet as long as they are spelled out in the listing agreement or the buyer’s broker agreement.
Lawyers involved in the class-action suit advise that to avoid confusion – and lawsuits – practitioners should define the commission as equal to “X” percent of the sales price plus “Y” dollars.
Kanovsky warned that if the total real estate broker fees on the HUD-1 are greater than the amount in the real estate listing agreement or the buyer’s broker agreement. HUD might review the excess charge to determine whether additional services were provided.
“Any charge for which no or nominal services are performed or for which duplicative fees are charged would violate RESPA,” she wrote.
Also, administrative fee charges without a contractual relationship with the buyer, might violate RESPA, according to Kanovsky.
Source: Inman News, Matt Carter (02/25/2010)
Front Gate Properties, We’re selling the BEST Real Estate in Aiken, SC.
HUD Won’t Delay New RESPA Rules
Federal regulators say there will be no further delays in implementing the proposed changes to the Real Estate Settlement Procedures Act (RESPA).
In a letter to industry groups signed by Federal Housing Commissioner David Stevens, the Department of Housing and Urban Development said it is “imperative” that the new rules be “fully operational on schedule.”
There’s still a possibility that Congress could intervene. Rep. Judy Biggert (R-Ill.), who has fought RESPA changes for more than five years, has proposed a delay in implementation of the current changes for “a reasonable amount of time.”
Banks are apparently willing to let the changes go through at this point. Wells Fargo Home Mortgage executives wrote HUD this week saying: “We have already programmed the mandated RESPA changes into over 40 computer systems and have no choice but to proceed with implementation of the new forms” on Jan. 1.
Source: Inman News, Matt Carter (10/16/2009)
Front Gate Properties, We’re selling the BEST Real Estate in Aiken, SC.
Jan 2010 changes are coming to RESPA
RESPA – Real Estate Settlement Procedures Act.
HUD is requiring that loan originators provide borrowers with a standard Good Faith Estimate that clearly discloses key loan terms and closing costs and that closing agents provide borrowers with a new HUD-1 settlement statement. New RESPA regulations were published November 17, 2008 and are scheduled to take full effect on January 1, 2010. The “New RESPA Rule FAQs” were comprised from industry questions and are posted to facilitate implementation of these new requirements.
Consumers
RESPA is about closing costs and settlement procedures. RESPA requires that consumers receive disclosures at various times in the transaction and outlaws kickbacks that increase the cost of settlement services. RESPA is a HUD consumer protection statute designed to help homebuyers be better shoppers in the home buying process, and is enforced by HUD.
Front Gate Properties, We’re selling the BEST Real Estate in Aiken, SC.
RESPA Required Use Rule in all new Closings!
The U.S. Department of Housing and Urban Development (HUD) has issued a new regulation to become effective on January 16, 2009, which reforms many aspects of its regulations implementing the Real Estate Settlement Procedures Act (RESPA). These changes are intended to clarify and simplify the disclosures that are provided to borrowers at mortgage application and closing. The rule consists of several parts, most of which will not have major direct or indirect impacts on home builders. One provision, however, will prohibit home builders from offering incentives in exchange for a home buyer using a builder’s affiliated mortgage and/or title company. A number of NAHB’s builder members either own or maintain joint ventures with mortgage and title companies. HUD’s new rule has thus taken away a critical marketing and customer service tool for our members.
* NAHB v. U.S. Dept. of Housing and Urban Development (U.S. District Court for the Eastern District of Virginia) Full Story!
Front Gate Properties, We’re selling the BEST Real Estate in Aiken, SC.