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New: Homebuyer videos section

January 28, 2011 Leave a comment

Sometimes it’s easier to understand a subject with visuals. Title insurance and the real estate closing process in general are just two examples. 

With that in mind, take a moment to tour our new Homebuyer Videos section. Real estate agents: Use this section as a resource for your homebuyers. And homebuyers: Use this section to learn more about what goes on behind the scenes leading up to closing.

Here at Federal Title, we believe it’s important to inform homebuyers, many of whom are purchasing a home for the first time. The more our homebuyers know in advance, the better prepared and the more comfortable they are when it comes time to sit down at the closing table.


Unfortunately, title insurance is tough to illustrate in pictures (hence our text-heavy blog).

Thankfully though, we’ve got friends at local company called Say it Visually, who’ve helped us explain the steps between ratified sales contract and signed HUD-1 settlement statement in terms as simple as stick figures.

We have plans to create a series of videos about various aspects of the closing process. We’ll post each video in the newly created Homebuyer Videos section.

As it turns out, these videos take some times to make, and so production is inching along slowly. All right, we only have two videos so far…

These days more and more web users are turning to online videos to learn everything from how to change a bicycle tire to, well, how to buy a house. But did you know Federal Title was the first in the title industry to produce videos for homebuyers explaining title insurance and closing costs?

Other title companies jumped on the bandwagon shortly after, and now even the U.S. Department of Housing & Urban Development is creating videos to help homebuyers understand the real estate closing process.

We know most homebuyers will do an online search before contacting a real estate agent. The wisest homebuyers will also research the title company that handles their settlement.

It’s our hope that by educating prospective homebuyers, using tools such as our Homebuyer Videos section, we they will be better equipped to make informed decisions throughout the homebuying and closing process.

Categories: closing costs, HUD

HUD releases helpful homebuyer videos

January 28, 2011 Leave a comment

Remember the kid in school that tried to copy off of everyone else?  As an adult, I don’t find it as annoying – in fact, I view it as a testament to what we do here at Federal Title.  

Federal Title was the first in the title industry to produce videos for homebuyers explaining the closing process and closing costs.  Soon after we released these videos, a few other competitors jumped in the video market.  

Now, the U.S. Department of Housing and Urban Development (HUD) jumped in by releasing three instructional videos for prospective homebuyers. HUD’s videos mainly focus on the homebuying process and shopping for a mortgage.  

The videos are each about 11 minutes long and narrated by Teresa Payne of HUD and might be the best cure for insomnia I’ve seen in a while. However, the videos are full of very useful information and if a prospective homebuyer would watch each of these videos, we would probably have a lot less questions at the closing table.  

All in all, the videos are a justifiable expense of taxpayer dollars and may just result in fewer regulations by HUD in the future – now that consumers are better-armed with information.  The videos can be found on HUD’s YouTube channel.

Categories: closing costs, HUD

Mortgage Lenders, Closing Agents Effected Most by New RESPA Rule

August 27, 2009 Leave a comment
FOR IMMEDIATE RELEASE

CONTACT:  Nikki Smith                       
Main line:  202-362-1500
Direct line: 202-274-1517
E-mail: nikki@federaltitle.com
Website: www.federaltitle.com

MORTGAGE LENDERS, CLOSING AGENTS EFFECTED MOST BY NEW ‘CONTROVERSIAL’ RESPA RULE
Expert to dissect consumer disclosure, anti-kickback statute at upcoming Q&A session. Free event.

Washington, D.C. – Mortgage banking and consumer finance expert Holly Spencer Bunting will address controversy surrounding the reformed Real Estate Settlement Procedures Act during a presentation and Q&A session next month.

The new RESPA rule, which aims to connect the dots between estimated closing costs set forth in the good faith estimate and actual closing costs disclosed in the HUD-1 form, will mostly impact mortgage lenders and closing agents.

“The rule continues to stir controversy,” Bunting said.

While there’s hope the U.S. Department of Housing and Urban Development will delay implementation, settlement service providers are gearing up for Jan. 1, 2010 effective date, she added.

Mortgage lenders and real estate agents are encouraged to attend the free luncheon event, beginning at 10 a.m. Wednesday, September 16 at the Kenwood Golf & Country Club in Bethesda, Md., presented by Federal Title & Escrow Company.

“At its core, the Real Estate Settlement Procedures Act, is a consumer disclosure and anti-kickback statute intended to alert consumers about their settlement costs and to prohibit kickbacks that could increase mortgage costs,” said Todd Ewing, president of Federal Title.

Claims that fraud, deception and general consumer ignorance led to the disastrous outcome of the real estate lending bubble fueled the overhaul of the home buyer protection statute. Bunting will provide an in-depth overview of the components of HUD’s final RESPA rule and the new HUD-1 and GFE disclosure forms.

About the Holly Spencer Bunting:
Bunting is an associate with the Washington, D.C. office of K&L Gates. She represents companies in mortgage lending, title insurance and real estate industries in connection with regulatory compliance matters, according to her biography on the company’s website.

Her articles have appeared in a variety of publications including “The Review of Banking and Financial Services,” “Mortgage Banking and Consumer Credit Alert,” and “The Banking Law Journal.”

About Federal Title & Escrow Company:
In an industry contaminated by affiliated business arrangements, kickbacks and other referral incentives, the Internet returns the power to the people. Federal Title recognizes consumer-driven market pressures, as exemplified by the new RESPA rule, and seeks to offer home buyers substantial closing cost savings and a streamlined settlement process.

Federal Title has a reputation of being technically innovative and always at the forefront of the latest real estate trends. Years ago the company made a bold move by eschewing all Affiliated Business Arrangements and established its REAL Credit Program, which saves home buyers up to $2,000 on closing costs.

Now Playing: Closing Costs Explained Visually

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New RESPA Rule FAQs – Good Faith Estimates

August 21, 2009 Leave a comment

1) Q: What happens if a GFE is not provided to a borrower?

A: In a transaction involving a federally related mortgage, the loan originator is required to provide a GFE to the borrower. Failure to provide a GFE as required is a violation of Section 5 of RESPA.

2) Q: When will the use of the new GFE and HUD-1 forms be required?
A: The new GFE and HUD-1 forms must be used as of January 1, 2010. The new GFE and HUD-1 forms may be used before this date. Please note that if a loan originator issues a GFE on the new form, then the settlement agent must use the new HUD-1 form and the tolerances and other requirements in the revised RESPA regulations will apply.

3) Q: If a GFE is issued on the old form prior to January 1, 2010, and the loan will close after January 1, 2010, which HUD-1 form is to be completed by the settlement agent?

A: If a GFE is issued on the old form prior to January 1, 2010, then the old HUD-1 form must be used even if closing will occur after January 1, 2010. For GFEs issued on the old form, the loan originator has the option to reissue the GFE (with the same terms and charges) on the new form, in which case the settlement agent must complete the new HUD-1 form.

4) Q: When does a loan originator have to issue a GFE?

A: A loan originator must issue a GFE no later than 3 business days after the loan originator receives an application or information sufficient to complete an application. Application is defined as the submission of a borrower‘s financial information in anticipation of a credit decision relating to a federally related mortgage loan, which shall include the following: (1) borrower‘s name, (2) borrower‘s monthly income; (3) borrower‘s social security number to obtain a credit report; (4) property address; (5) estimate of value of the property; (6) loan amount and (7) any other information deemed necessary by the loan originator.

5) Q: What is a loan originator?

A: “Loan originator” means a lender or a mortgage broker.

6) Q: What fees can a loan originator charge before issuing a GFE?

A: Prior to issuing a GFE, the loan originator may, at its option, collect a fee limited to the cost of a credit report.

7) Q: I am a mortgage broker. Can I provide the GFE?

A: Yes, a mortgage broker can provide the GFE, however the lender is ultimately responsible for ascertaining that the GFE was provided to the applicant.

8) Q: There are not enough lines on the GFE or the HUD-1 to show all of the charges that are appropriate for some of the categories. Where should these charges be listed?

A: Additional lines may be added to Blocks 3, 6 and 11 of the GFE. Additional lines may also be added to the HUD-1.

9) Q: Is a GFE a loan commitment?

A: No, the GFE is not a loan commitment. A GFE is an estimate of settlement charges a borrower is likely to incur to obtain a specific loan.

10) Q: At what point can a loan originator charge a loan applicant fees for services other than the cost of obtaining a credit report?

A: After a loan applicant both receives a GFE and indicates an intention to proceed with the loan covered by the GFE, the loan originator may collect fees beyond the cost of a credit report for origination-related services.

11) Q: If the borrower is taking out two loans to finance the purchase, how should the loan originator disclose the charges from each loan on the GFE and the HUD-1?

A: Each loan must have a separate GFE and a separate HUD-1. However, the principal amount of the second loan and a brief explanation of the second loan should be listed on Lines 204 – 209 of the HUD-1 for the first loan.

12) Q: What are processing and administrative services?

A: Processing and administrative services are those services required to perform the functions involved in title service and origination service. Processing and administrative services include, but are not limited to the following: document delivery, document preparation, copying, wiring, preparing endorsements, document handling and notarization.

*The preceding Q&A was originally published on the HUD website.

New RESPA Rule FAQs – HUD-1 Forms

August 20, 2009 Leave a comment

1) Q: How are courier and overnight delivery fees shown on the HUD-1 Settlement Statement?

A: Courier and overnight delivery fees are considered to be fees for administrative or processing services. They are part of a primary service, such as the origination service or title service, and may not be separately itemized.

2) Q: Does voluntarily using the HUD-1 in a transaction that otherwise is not subject to RESPA result in RESPA applying to the transaction?

A: No, using the HUD-1 form does not subject a transaction to coverage under RESPA.

3) Q: Does “conducting a settlement” (from the definition of “title service”) have the same meaning as “conducting the closing”?

A: Yes. The terms “conducting a settlement” and “conducting the closing” have the same meaning under HUD’s RESPA regulations and are subject to identical requirements under the regulations.

4) Q: What if at closing the seller is paying for a settlement service that was listed on the GFE, such as the Owner‘s title insurance policy? How is this shown on the HUD-1?

A: If the seller is paying for a service that was on the GFE, such as Owner‘s title insurance, the charge remains in the borrower‘s column on the HUD-1. A credit from the seller to the borrower to offset the charge should be listed on the first page of the HUD-1 in Lines 204-209 and Lines 506-509 respectively.

5) Q: If there are additional government recording fees, such as to record a power of attorney or road maintenance agreement, are they included in Line 1201 of the HUD-1 or can they be charged separately?

A: Line 1201 is used to record the total government recording charges. Additional items the lender requires to be recorded, other than those already enumerated in Line 1202, must be itemized on Line 1206. The charges for these additional items must be stated outside the column.

6) Q: How do settlement agents get the information to prepare page 3 of the HUD-1? Do they have to search through all of the loan documents to get this information?

A: The lender is required to transmit the information necessary to complete the HUD-1. The instructions for completing the HUD-1 state that the lender must provide information to the settlement agent in a format that permits the settlement agent to simply enter the necessary information to complete the loan terms section on page 3 of the HUD-1 without having to refer to the loan documents.

7) Q: Is it a violation of the tolerance if some of the items in the 10% category in the Comparison Chart exceed 10%, but other items in the category do not exceed 10%?

A: The tolerance applies to the total of all charges shown in the category ―Charges That in Total Cannot Increase More Than 10%.‖ A tolerance violation of this category means that the total of all actual charges in this category exceed the total of all estimated charges in this category by more than 10%.

*The preceding Q&A was originally published on the HUD website.

New RESPA Rule FAQs – General Information

August 19, 2009 Leave a comment

1) Q: When does the new RESPA Rule take effect?

A: The November 2008 RESPA Rule was effective January 16, 2009. Implementation of the provisions are as follows:


2) Q: When does the revised required use definition take effect?

A: The revised required use definition was withdrawn by a separate final rule published May 15, 2009.

3) Q: Can a loan originator e-mail a GFE to a borrower?

A: Yes; as long as the borrower consents and the other specific requirements for consumer disclosures under the Electronic Signatures in Global and National Commerce Act (ESIGN) are met, a loan originator may e-mail, fax, or send by other electronic means the GFE (and other RESPA disclosures, such as the HUD-1/1A). See section 101(c) of ESIGN, 15 U.S.C. 7001(c); also see 24 CFR 3500.23. The loan originator may also continue to deliver the GFE to the borrower by hand delivery or by placing it in the mail, as provided by RESPA.

4) Q: RESPA and HUD‘s RESPA regulations require that certain records be retained for a period of time. Can those records be retained electronically?

A: Yes, if the person responsible for retaining records under RESPA and HUD’s RESPA regulations meets the specific requirements and limitations applicable to the retention of electronic documents set out in the Electronic Signatures in Global and National Commerce Act (ESIGN), that person’s responsibility will be satisfied by the retention of electronic records. See sections 101(d) and (e) of ESIGN, 15 U.S.C. 7001(d) and (e); also see 24 CFR 3500.23.

5) Q: Can we translate the GFE and the HUD-1 into languages other than English?

A: Yes, it is permissible to translate the GFE and the HUD-1 as long as the form has been translated accurately.

*The preceding Q&A was originally published on the HUD website.

How Well Do YOU Understand RESPA?

August 18, 2009 Leave a comment

At its core, the Real Estate Settlement Procedures Act, better known as RESPA, is a consumer disclosure and anti-kickback statute intended to alert consumers about their settlement costs and to prohibit kickbacks that could increase the cost of getting a mortgage.

New RESPA regulations were published in November 2008 and are scheduled to take effect Jan. 1, 2010. To prepare for the changes, Federal Title & Escrow Company is hosting a free event for 100 guests, which will feature a presentation by mortgage banking and consumer finance expert Holly Spencer Bunting.

To attend this free event and learn more about RESPA, contact the marketing department at Federal Title.

Wondering just how savvy you are when it comes to RESPA? Take this RESPA Quiz created by Realtor.org and test your knowledge of the law.