Vail Valley: Big changes are coming to the home mortgage industry
Vail, CO, Colorado
The goal of the current reforms taking place in the mortgage industry is a more informed consumer and, ultimately, better home financing decisions by homeowners in the Vail Valley and elsewhere.
Beginning Jan. 1 all lenders will be required to use the new Good Faith Estimate form, and the new HUD-1 Settlement Statement must be used in conjunction with the new estimate form.
Quoted costs in the estimate are subject to “tolerances,” which are defined as the maximum amount by which the charge for a category or categories of settlements may
While there has been some concern among Realtors that the new estimate form will delay closings, this should not be the case. Realtors will still do business as usual, taking care to provide the borrower with additional information that will allow consumers to shop for the best loan.
A few steps at the beginning of the transaction can go a long way toward avoiding closing delays. For example, Realtors can encourage clients to lock interest rates early rather than gamble on a small dip. Realtors can also help their clients negotiate the final purchase price up front rather than haggling about price later.
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My employer, Land Title Guarantee Company, has been working closely with industry experts to ensure we have accurate, up-to-date information and answers for our clients.
Additionally, our staff has taken more than 1,500 hours of training, and we’ve updated our processes and systems to help our clients meet the new requirements accurately and efficiently.
The new forms are ready to go now, and our closing team will inform clients immediately about any changes.
Other steps we’ve taken include:
• Immediately identifying new lenders through the selling agents.
• Contacting lenders within 24 hours of receipt of the pre-qualification letter or lender contact information.
• Immediately notifying the lender of any title or settlement fee changes.
Here are some common questions we’ve received about the new regulations and paperwork:
Q: If there are two loans, do there need to be two estimate forms and two HUD forms?
Q: What fees should be included on the Good Faith Estimate?
A: All fees typically paid by the borrower are included, regardless of whether the fee will be paid by the seller, lender, or Realtor. The list must be provided at the time the estimate is issued.
Q: Why is the Owner’s Title Policy disclosed to the borrower on the Good Faith Estimate?
A: The form is used nationally, and in many states the borrower/buyer pays for that policy. In Colorado, the borrower will be charged for the Owner’s Policy but the charge will be credited back and paid by the seller.
To learn more about how these new requirements affects everyone involved in a real estate transaction, call any local Land Title Guarantee Company office in the Vail Valley. In Avon, call, 970-949-5099; in Vail, call 970-476-2251 and in Eagle, call 970-328-5065.
Trevor Theelke can be reached through any Land Title Guarantee Company office.