Missouri Real Estate Forms

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Missouri Real Estate Forms Powered By Docstoc
					  Presented By:
Dennis Deischer
           New GFE and HUD-1
• Number of changes
• Three page forms
• Effective January 1, 2010
  –   If GFE used before, must comply with all rules
  –   If GFE used before, must use new HUD-1
  –   If HUD-1 used before, must comply with all rules
  –   If HUD-1 used before, must follow new GFE
                  GFE Required…
• Within 3 business days of receipt of “application”
   – Six pieces of information minimum for application
      •   Name
      •   SSN
      •   Income
      •   Property address
      •   Estimated value
      •   Loan amount
   – Lender/broker prohibited from requiring more info to
     verify “application” before GFE, but may after GFE
Transaction Identification Section
   • Originator name and contact Information
   • Borrower name and subject property
   • GFE date, key in defining the period that the GF forms are available
Purpose Section
   • Explains the purpose of the GFE
   • Identifies sources of additional information
   • Advises how to proceed
Shopping for Your Loan Section: Advises that only the consumer can
     shop for the best loan for him or her
• Important Dates Section
    • Specify the date and, at option, the time through which the interest
        rate and certain rate-dependent charges are available
        • Interest rate-dependent charges
             • Credit or charge for the interest rate chosen
             • Adjusted origination charges
             • Per diem interest

    • Specify the date through which all other charges are available
        • Minimum 10 business day period

    • Specify rate lock timeframes
        • Provide the rate lock period that will apply once the rate is locked
        • If applicable, note the minimum time for lock before settlement

    • Enter “Not applicable” or “NA” as appropriate for Lines 1 – 4
• Summary of Your Loan Terms Section
    • Addresses nine elements of the loan
    • For the interest rate, enter the note rate and not the APR
• Escrow Account Information Section: Addresses whether loan includes escrow

• Summary of Your Settlement Charges Section

    • Block A: Adjusted origination charges from Block A on pg. 2
    • Block B: Total of all other settlement charges from Block B on page 2
    • Block A+B: Sum of the two amounts
      Your Adjusted Origination Charges Section
• Relationship between the interest rate and the settlement costs
• Includes Yield Spread Premium paid to broker
• Combines all the various loan origination charges into a single charge
Block 1: Must include all origination charges of lender/broker including YSP
              (No “POC” with amounts allowed on GFE)
    • All fees associated with getting the loan, such as application, processing,
              underwriting, administration, document preparation, wire, lender
              inspection, mortgage broker, loan handling, and other miscellaneous
    • If no broker; lender may (not required) include credit or charge (points)
              for rate chosen in Block 1, with 0.00 in amount column of Block 2;
    • If there is a broker, any credit/charge must be disclosed in Block 2
      Your Adjusted Origination Charges Section

Block 2
    • To reflect credit for rate chosen, check 2nd box and insert amount and
              interest rate in applicable blanks; Enter dollar amount as negative
    • To reflect a charge (points), check 3rd box and insert amount and
              interest rate in blanks; Enter charge as a positive
    • 2nd and 3rd boxes are like radio buttons; cannot check both

Block A: Total of Blocks 1 and 2
Your Adjusted Origination Charges Section – Examples
$100,000 loan, no points, lender fees of 1.5%, broker compensation is YSP of 2%
   • Block 1: “Our origination charge” - $3,500 ($1,500 fee plus $2,000 YSP)
   • Block 2: “Your credit or charge (points) for the specific interest rate chosen” –
         Complete 2nd check box, enter $2,000 credit and rate in blanks; In
         Block 2, YSP is entered as a negative
   • Block A: “Your Adjusted Origination Charges” - $1,500 ($3,500 from Block 1,
         less $2,000 from Block 2)

$100,000 loan, 2 points to buy down rate, lender fees of 1.5%, broker fee of 1%
   • Block 1: “Our origination charge” - $2,500 ($1,500 lender fees + $1,000 broker)
   • Block 2: “Your credit or charge (points) for the specific interest rate chosen” –
         Complete 3rd check box; $2,000 and rate. Block 2 amount of $2,000
   • Block A: “Your Adjusted Origination Charges” - $4,500 ($2,500 from Block 1
         plus $2,000 from Block 2)
         Your Charges for All Other Settlement Services Section
• Block 3 – “Required services that we select”
    For services required and provider selected by originator (excluding titles
    services), list each service and estimate charge and enter total in Block 3, e.g.
    providers of credit reports, appraisals, flood certifications, real property tax related
    services, and mortgage insurance
• Block 4 – Title services and lender’s title insurance
    Enter total estimated charge for all title searches, examinations and endorsements,
    as well as delivery, notary and settlement fees
• Block 5 – Owner’s title insurance
    For purchase transactions, enter total estimated charge for all title premiums
                   and endorsements in Block 5
    For non-purchase transactions, enter “NA” or “Not Applicable”
Block 6 – Required services that you can shop for
   • For each service; list each service and estimated charge and total, e.g.,
        survey, pest inspection, etc.
   • Provide separate list of service providers at time of GFE
Block 7 – Government recording charges
        Enter total estimated recording charges in Block 7. No transfer taxes
Block 8 – Transfer taxes
        Enter estimated sum of all state and local fees on mortgages and home
        sales based on loan amount or sales price and property address
Block 9 – Initial deposit for your escrow account
   • Enter total required escrow at closing in Block 9
   • Indicate if for all property taxes, all insurance and any other items
   • If deposits are required for some, but not all, insurance, Check the
        “other” box and identify the applicable taxes and/or insurance
Block 10 – Daily interest charges
  • In blanks, enter amount of interest for each day, number of estimated
       days and the anticipated settlement date
  • Enter total daily or per diem interest in Block 10

Block 11 – Homeowner’s insurance
  • List required hazard or similar insurance, (i.e. flood) and estimated
  • Enter total in Block 11

Block B – Your Charges for All Other Settlement Services
    Enter total from Blocks 3 through 11

Block A + B – Total Estimated Settlement Charges
    Enter sum of Block A (Your Adjusted Origination Charges) and Block B
      Understanding Which Charges Can Change at Settlement Section

• Section explains applicable limits/tolerances on changes in estimated fees

• No need to enter information in this section
                          Using the Tradeoff Table Section
           Intent: Demonstrate relationship between rate and settlement costs

•   Originator must enter information about loan covered by the GFE in left column
•   Completion of remainder of the table is optional
•   Center column – alternate loan with lower settlement charges and higher rate
•   Right column is alternate loan with higher settlement charges and lower rate
•   If you elect to add information on alternate loans
        • Information must be for loans you actually would offer
        • Alternate loans must be identical to loan covered by GFE, except for rate and
             settlement costs
• Using the Shopping Chart Section
    • For completion by consumer as a loan comparison tool
    • There is nothing for lender/broker to enter

• If Your Loan is Sold in the Future Section
      Notes that a future loan sale will not change the loan or the charges paid at
    GFE Duration - §3500.7(f)
• Duration
  – GFE of most charges must be good for at least 10
    business days, unless new GFE provided prior to
  – Exceptions
     •   Interest Rate
     •   Credit/Charge for Lock-In Rate
     •   “Adjusted Origination Charges”
     •   Per Diem Interest
  – Retain documentation of reasons for providing new
    GFE no less than 3 years after settlement
   Changes/Redisclosure - §3500.7(f)
• Revised GFE to be provided within 3 business days of
  receiving information establishing “changed circumstance”
   – Affecting settlement costs
   – Affecting the loan
   – Based on borrower-requested changes
• Originator not bound by GFE if borrower does not express
  intent to continue within 10 business days
• If interest rate has not been locked by the borrower, or a
  locked interest rate has expired, appropriate charges may
  change, e.g.
   – Borrower later locks, new GFE showing revised interest rate-dependent
     charges and terms must be provided
   – All other charges and terms must remain the same as on the original
          RESPA - HUD-1/1A
          Settlement Statement
• At Closing and Upon Request Day Before
• Process Changes Necessary
  – Significant communication and coordination with
    outside closing agents
     • Use of new GFE requires use of HUD-1
     • Closing agents need GFE when issued
  – Significant communication and coordination with
    service providers
     • Timing of fee notification to closing agent
     • Advance notice of changes in fees prior to GFE
• Basic format remains – still provides
  itemization of fees
• Changes
  – Cross reference on various lines to appropriate GFE
  – Different approach to itemizing certain charges
  – Added new page
     • Compares GFE and HUD-1 charges
     • Summarizes loan
Both HUD-1 and -1A have transaction
 identification section at top of forms
• HUD-1 includes summary of borrower’s and seller’s transaction
   on first page
• HUD-1A includes only a summary of borrower’s transaction –
   “seller-less” transaction
Both 2nd page of HUD-1 and 1st page of HUD-1A still provide listings of charges
700 – Total Real Estate Broker Fee: Not included in HUD-1A
800 – Items Payable in Connection with Loan
  • Lines 801 to 803 follow three part approach of GFE to disclose lender’s origination
        • Lines 801 and 802, applicable amount is disclosed left of borrower’s column
        • Line 803, amount must be listed in borrower’s column, as negative number
             (if credit), positive (if charge), or zero
  • Lines 804 to 808
        • Disclose the applicable amount in borrower column, or to left of
             column, based on whether charge is paid at or outside closing
             • For POC charges, must show party paying charge (“P.O.C. (Borrower))”
900 – Items Required by Lender to Be Paid in Advance
 • Applicable amounts paid at settlement reflected in borrower’s column
 • Do not include any amounts for deposit into escrow or impound account

1000 – Reserves Deposited with Lender
  • This series for disclosure of amounts for deposit into escrow account
  • Total deposit is entered on the 1001
  • Amounts In 1002 to 1007 are an itemization of total deposit in line 1001
  • Note… line 1007 is for aggregate accounting adjustment, which is a
      negative number or zero
1100 Title Charges
   • Title service charge and lender’s title insurance premium disclosed at 1101
   • If settlement or closing fee is included on line 1101, then disclose to left of
         borrower’s column on line 1102
   • Owner’s title charge disclosed in borrower’s column on line 1103
   • Charge for lender’s title insurance disclosed to left of borrower’s column on
         Line 1104 (already included in 1101)
   • Lender’s and owner’s title policy limits, and agent’s and underwriter’s
         portions of insurance premium disclosed to left on 1105-1108
1200 Government Recording and Transfer Charges
   • Total recording charges are disclosed in borrower’s column on 1201;
         Itemization of charges are disclosed to left of borrower’s column at 1202
   • Total transfer taxes are disclosed in borrower’s column 1203
   • Itemization of transfer taxes disclosed to left 1204 to 1205
1300 – Additional Settlement Charges
   • Total of required services that borrower can shop for included in borrower’s
        column at 1301
        • Individual services itemized on lines that follow; amounts to left
   • 1300 series also used to reflect miscellaneous itemized settlement
        charges not included in any specific category, such as charge for a
        warranty plan
        • These amounts entered in borrower’s/seller’s columns
1400 – Total Settlement Charges: Total amount of charges in columns
     700 – 1300
Seller paid fees
   • There is a special rule to disclose amounts paid by seller to provide for the
        comparison of GFE to HUD-1
   • Even if seller pays a charge, charge must be recorded in borrower’s
        column on appropriate line; on page 1, credit to borrower entered in 200
        series and corresponding charge to seller must be entered in 500 series
New Page 3 of HUD-1 contains “crosswalk” providing comparison to GFE in
       three parts based on the tolerances
   • Charges That Cannot Increase
   • Charges That in Total Cannot Increase More Than 10%
       • Government recording charges
       • Required services when the originator selects the provider
       • Required services, required title insurance and owner’s title insurance,
                when borrower selects the provider identified by the originator
   • Charges That Can Change
New page of HUD-1 contains a summary of the loan terms
  Although similar to summary in the GFE, this summary includes further
  detail because the terms of the loan are known.

    If applicable must provide:
    •    Specific date on which the rate can first change
    •    Period between subsequent rate changes
    •    Maximum rate movement on a change date
    •    Amount of monthly escrow or impound account payment
    •    Specific date on which a balloon payment is due
   The New GFE and HUD-1

Thank you………

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