Real Estate Settlement & Procedures Act (RESPA)

This recent article raised a good point that the lender, by RESPA law, is limited to an annual cushion of 1/6th the annual charge for both property taxes and homeowner’s insurance.

HUD requires that loan originators provide borrowers with a standard Good Faith Estimate that clearly discloses loan terms and closing costs and 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.


However, as disclosed from my earlier BLOG post, the passage of the Dodd-Frank Act created the Consumer Financial Protection Bureau (CFPB).  One of their new responsibilities, once they are formally in place,is to integrate the Truth In Lending Disclosure form with the Good Faith Estimate (GFE) disclosure forms. To their credit, CFPB is continuing to listen to input from the lending community regarding information and format of new disclosure, but they have once again delayed the release of the combined form.


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