Questions and Answers Regarding RESPA Reform

In Colorado Springs and Loveland, CO, staff and customers attended RESPAReady educational events hosted by ET Investments.  We had some great discussions and took on many interesting topics including "how in the heck are mortgage brokers going to earn revenue in a post  RESPA reform world?".  Answer, they won't be receiving yield spread premium dollars any longer - all of their origination, processing and administrative fees will now need to be included in line 801 of a 2010 HUD form (along with the lender's origination fees).  We talked about ways that originators and settlement providers will exchange information accurately and in time for 2010 RESPA compliance.  I met a member of Bank of America's RESPA Implementation Team, and she assured me they are hard at work getting RESPA Ready.  We also discussed HUD's new FAQs - if you haven't yet seen them, you need to read them; they are linked in earlier blogs here at RESPAReady.com  We even had a gentleman in the audience who closed down his mortgage brokerage shop earlier this year and returned to the world of mortgage banking - due to the provisions of the updated RESPA Regulation.
 
Last week it was on to DC for meetings with HUD and the MBA.  Look for even more guidance from HUD in upcoming FAQ additions; including further clarification regarding several key questions such as the correct way to reflect a tolerance violation cure on a revised HUD-1.  HUD is committed to seeing RESPA Reform through and they were gracious in hearing our remaining implementation questions.  I think ALTA and HUD have demonstrated a good working relationship through this implementation process.  Oh, for those of you who wanted to show the borrower's share of closing fee outside the column on line 1102 regardless of who conducts the closing...watch the upcoming FAQs for one I think you'll be happy to see.
 
Next, I visited the Texas Land Title Association for their RESPA Reform Roadshow.  Several guest speakers including Ann vom Eigan from HUD supplied their thoughts and comments on RESPA Reform.  We got a first look at the major software providers' (RamQuest, AIM and Softpro) 2010 HUD-1 forms (of course I have an opinion as to which is the most comprehensive - and that view was shared by the attendees I spoke with).  So Texas is getting RESPA Ready! 
 
If you haven't yet attended RESPA training, or shopped the software provider market, now is the time to get busy.  We also heard that Calyx released their 2010 loan origination solution.  So if you use Calyx to originate loans, or if you have a customer who does - now is the time to run some test 2010 GFEs.  These GFEs could then be used as a basis for a 2010 HUD-1 form...in short, you could test the entire process right now and be confident that you and your partners are ready to go!
 
Finally on Friday it was a quick trip to Austin for more RESPA Reform seminars.  We had Realtors, mortgage lenders and mortgage brokers in the room.  For many it was their first exposure to 2010 RESPA.  Needless to say, we had lively debate.  Many wondered if the change to the way real estate commissions are shown would result in higher commission rates.  We also talked about the court case in Alabama that ruled that those transaction fees that some real estate companies charge are invalid, describing them as unearned fee income.  Everyone thought that might result in rising commission fees.  Regions Bank let us know that they will not implement the 2010 GFE before Jan 1.
 
This week it is on to Reno to teach more RESPA Reform.  It's great to see people embracing the change, working to learn the new rule, and thinking about ways to proactively prepare their business.  And take heart, if you think this is impossible, I heard from Janet Minke who in 1974 (when RESPA was launched for the first time) was sent by her company to learn about this new thing called RESPA.  Janet gave a very thoughtful analysis of today's RESPA Reform and said "It won't be easy!  Certainly not for the first 3 or 6 months, anyway.  And it will probably be 2 years before you're as comfortable with the new HUD-1 form as you are today.  BUT, you can survive".  I take those words from Janet to heart and hope you do too.  Afterall, if someone who's been through that much change during her career feels confident we can evolve, survive and even thrive - then it must be true!
 
Keep walking down your RESPAReady path.  We'll keep blazing the trail and reporting from the road.