RESPA Reform Illustration of the 2010 GFE and

RESPA Reform Illustration of the 2010 GFE and HUD-1 Provided as a courtesy by Southern Abstract Company www. southernabstract. com

Notice: This information has been provided by Southern Abstract Company for your convenience and is not a substitute for knowledge of the current federal regulations regarding the Real Estate Settlement Procedures Act. For additional information or instructions, please consult your attorney or other appropriate professional advisor or the Office of RESPA at the Department of Housing and Urban Development (202 -7080502).

New Forms New 3 -page GFE Grouping of fees Tolerance levels Shopping Revised HUD-1 with new Page 3 Grouping of fees Specific references to GFE Comparison of GFE fees to HUD fees Loan terms

New GFE Summary Details Tolerances, Comparisons

New GFE – Page 1

New GFE – Page 1 Must be at least 10 business days from the date of the GFE 1/4/2010 at 5: 00 pm 1/19/2010 30 15

New GFE – Page 1 108, 000. 00 30 5. 125 X 588. 05 X X X 588. 05

New GFE – Page 2 All fees traditionally charged to the borrower, regardless of who pays, must be listed on the GFE. Eleven categories

Definitions Our origination charge (Block 1) Origination service means any service involved in the creation of a mortgage loan, including but not limited to the taking of the loan application, loan processing, and the underwriting and funding of the loan, and the processing and administrative services required to perform these functions. Administrative services can include document preparation, document delivery, copying, notarization, wiring, lender inspection, loan handling, courier/overnight delivery fees and other miscellaneous fees.

Definitions Title services and lender’s title insurance (Block 4) Title service means any service involved in the provision of title insurance (lender's or owner's policy), including but not limited to: title examination and evaluation; preparation and issuance of title commitment; clearance of underwriting objections; preparation and issuance of a title insurance policy or policies; and the processing and administrative services required to perform these functions. The term also includes the service of conducting a settlement.

New GFE Zero 10% Can Tolerance Change Fees disclosed, but paid by others, are still bound by the A lender must “cure” a tolerance violation by refunding the overage to the borrower at closing or within 30 calendar days. tolerances. Tolerance means the maximum amount by which the charge for a category or categories of settlement costs may exceed the amount of the estimate for such category or categories on a GFE.

New GFE Zero Tolerance Block 1 – Origination Charge Block 2 – Credit or charge for the interest rate Block A – Your adjusted origination charge Block 8 – Transfer taxes

New GFE 10% Tolerance Block 3 – Required services that we select Block 7 – Government recording charges Blocks 4, 5 and 6 will be subject to the 10% tolerance when the borrower uses a settlement service provider identified by the loan originator. Block 4 – Title services and lender’s title insurance Block 5 – Owner’s title insurance Block 6 – Required services you can shop for

New GFE Can Change Block 9 – Initial deposit for escrow account Block 10 – Daily interest charges Block 11 – Homeowner’s Insurance Blocks 4, 5 and 6 will not be subject to the 10% tolerance when the borrower chooses a settlement service provider not identified by the loan originator. Block 4 – Title services and lender’s title insurance Block 5 – Owner’s title insurance Block 6 – Required services you can shop for

New GFE – Page 3

Can a revised GFE be issued?

Revised GFE Changed circumstances Borrower requested changes Expiration of original GFE Interest rate dependent changes and terms (until the rate is locked) New home purchases

Revised GFE Changed circumstance Acts of God, war, disaster, or other emergency The loan originator ONLY A revised GFE must may be issued change those chargesdays andof terms Inaccurate particular to the within 3 information business borrower or transaction affected by the changed receiving thespecific information New information particular to the circumstance. sufficient to establish changed borrowercircumstance. or transaction Other circumstances particular to the borrower or transaction

Revised GFE NOT a changed circumstance Any of 6 pieces of original info unless there are changes or they are found to be inaccurate Market price fluctuations

New HUD-1 No changes Changed All New

HUD-1 – Page 2 Outside the column In (Inside) the column

HUD-1 – Page 2 References back to specific blocks on GFE

HUD-1 – Page 2 700 Series 4, 250. 00 ABC Real Estate Company 4, 050. 00 XYZ Real Estate Company 8, 300. 00

HUD-1 – Page 2 800 Series 3, 180. 00 (1, 000. 00) 2, 180. 00 Appraisal Company Credit Report Company 275. 00 Tax Service LLC 30. 00 70. 00 Best Mortgage Company 11. 00

HUD-1 – Page 2 900 Series 01/13 02/01 1 15. 164 The Insurance Company 272. 96 719. 00

HUD-1 – Page 2 1000 Series 227. 36 3 57. 50 172. 50 4 28. 09 112. 36 57. 50

HUD-1 – Page 2 1100 Series 750. 00 312. 60 $50. 00 $108, 000. 00 $135, 000. 00 Information Only $253. 82 $108. 78 250. 00 $150. 00 15. 00 20. 00

HUD-1 – Page 2 1200 Series 58. 00 13. 00 45. 00 15. 00 108. 00 202. 50

HUD-1 – Page 2 1200 Series 63. 00 58. 00 13. 00 45. 00 15. 00 108. 00 113. 00 202. 50 Mortgage Certification Fee 108. 00 $5. 00 202. 50

HUD-1 – Page 2 1300 Series 150. 00 Pest Inspection to Pest Control Company Survey Home Warranty to Survey Company to Home Warranty Company 150. 00 225. 00 440. 00

HUD-1 – Page 3 108, 000. 00 30 5. 125 588. 05 x x 10% Can Zero Tolerance Change Tolerance x x x x 85. 59 673. 64 x

Putting it Together GFE – Page 2 HUD-1 – Page 3 HUD-1 – Page 2

Putting it Together GFE – Page 2 HUD-1 – Page 3 HUD-1 – Page 2

Putting it Together 3, 180. 00 GFE Page 2 x 1, 000. 00 5. 125 -1, 000. 00 2, 180. 00 HUD-1 Page 3 3, 180. 00 (1, 000. 00) 2, 180. 00 3, 180. 00 (1, 000. 00) HUD-1 Page 2 2, 180. 00 ABC Appraisal Company Best Mortgage Company Tax Service LLC Best Mortgage Company 275. 00 30. 00 70. 00 11. 00 Zero Tolerance

Putting it Together GFE Page 2 105. 00 HUD-1 Page 3 3, 180. 00 (1, 000. 00) 2, 180. 00 105. 00 3, 180. 00 (1, 000. 00) 2, 180. 00 108. 00 58. 00 HUD-1 Page 2 13. 00 45. 00 15. 00 108. 00 202. 50 Zero Tolerance

Putting it Together GFE Page 2 54. 00 58. 00 HUD-1 Page 3 58. 00 HUD-1 Page 2 10% Tolerance 13. 00 45. 00 15. 00 108. 00 202. 50 -4. 00

Putting it Together GFE Page 2 HUD-1 Page 3 386. 00 Appraisal Credit Report Tax Service Flood Certification Appraisal Company Credit Report Company Tax Service LLC Best Mortgage Company 275. 00 30. 00 70. 00 11. 00 804 805 806 807 54. 00 275. 00 30. 00 70. 00 11. 00 58. 00 275. 00 30. 00 70. 00 11. 00 3, 180. 00 HUD-1 Page 2 10% Tolerance (1, 000. 00) 2, 180. 00 Appraisal Company Credit Report Company 275. 00 30. 00 Tax Service LLC 70. 00 Best Mortgage Company 11. 00 - 4. 00 00. 00

Putting it Together GFE Page 2 HUD-1 Page 3 75. 00 Pest Control Company Appraisal Company Credit Report Company Tax Service LLC Best Mortgage Company Pest Control Company 75. 00 54. 00 275. 00 30. 00 70. 00 11. 00 75. 00 804 805 806 807 1301 58. 00 275. 00 30. 00 70. 00 11. 00 150. 00 HUD-1 Page 2 10% Tolerance Pest Inspection to Pest Control Company Survey Home Warranty to Survey Company to Home Warranty Company 150. 00 225. 00 440. 00 - 4. 00 00. 00 -75. 00

Putting it Together 800. 00 GFE Page 2 HUD-1 Page 3 521. 00 Appraisal Company Credit Report Company Tax Service LLC Best Mortgage Company Pest Control Company Southern Abstract Company 804 805 806 807 1301 1103 54. 00 275. 00 30. 00 70. 00 11. 00 75. 00 800. 00 521. 00 58. 00 275. 00 30. 00 70. 00 11. 00 150. 00 750. 00 312. 60 1, 836. 00 0. 00 1, 656. 60 0 750. 00 HUD-1 Page 2 10% Tolerance 312. 60 $50. 00 $108, 000. 00 $135, 000. 00 $253. 82 $108. 78 250. 00 $150. 00 15. 00 20. 00 - 4. 00 00. 00 - 75. 00 + 50. 00 +208. 40 +179. 40

Putting it Together HUD-1 Page 3 Appraisal Company Credit Report Company Tax Service LLC Best Mortgage Company Pest Control Company Southern Abstract Company 804 805 806 807 1301 1103 10% Tolerance 44. 00 175. 00 30. 00 70. 00 11. 00 75. 00 800. 00 350. 00 58. 00 275. 00 30. 00 70. 00 11. 00 150. 00 750. 00 312. 60 - 14. 00 -100. 00 - 75. 00 + 50. 00 + 37. 40 1, 555. 00 101. 60 1, 656. 60 6. 5 -101. 60

Putting it Together Can Change GFE Page 2 300. 00 x x 106. 15 7 1/25/2010 $15. 164 900. 00 Property & Casualty 900. 00 HUD-1 Page 3 300. 00 106. 15 900. 00 272. 96 01/13 02/01 15. 164 HUD-1 Page 2 1 227. 36 272. 96 719. 00 The Insurance Company 719. 00 227. 36 3 57. 50 172. 50 4 28. 09 112. 36

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