I understand that HUD has released a final rule with respect to changes to the Real Estate Settlement and Procedures Act.  How will that impact me?

The goal of HUD is to make closings for consumers as informative as possible and, in particular, it encourages competition amongst lenders and it mandates that the settlement charges that lenders disclose to borrowers be made up front and that there be a consistency between the good faith estimate which must be given within three days of receiving an application and the final settlement numbers.  The rule has strict guidelines with respect to changes on the estimates and the final charges set forth at the settlement. 

 The purpose of these rules is to encourage efficiency amongst settlement providers.  It is the view of at least one practitioner that the rule is intended to replace independent attorneys and title examiners by encouraging an industry which will rely heavily on volume in order to decrease costs.  We all know what has happened in the mortgage market as a result of large volume providers of mortgage money which seek to obtain efficiency but give little attention to detail.  It is the opinion of many that ultimately the rule will prove to be more expensive in the long run to consumers as a result of errors and lack of training of those in the settlement process.

If you have questions about this or any other real estate matter, please contact Tom Bennett at (617) 531-6574 or tvb@barronstad.com.