Question about the RESPA reform?

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Article found here: http://www.loansafe.org/fha-commissioner-on-respa-reform-and-safe-mortgage-licensing-act-safe

I’m thinking of purchasing a home and I went to a mortgage company and one of the papers I’ve gotten it says GFE (Good Faith Estimate). I know that they overestimate all the prices and etc loan. But when reading the article i had a bit of a confusion where it read: “However, loan originators should ensure the following: (1) to eliminate consumer confusion, a worksheet should
not look like a GFE and should not lead the customer to believe that it is a GFE and (2) a loan originator should NEVER use a worksheet in lieu of a GFE.” What does that mean? AND “Specifically, the rule provides: “(1) A payment by an HWC for marketing services performed by real estate brokers or agents on behalf of the HWC that are directed to particular homebuyers or sellers is an illegal kickback for a referral under section 8; ”

Thank You!

1 Comment
  1. Reply
    Banker
    February 16, 2011 at 5:45 am

    Well to start with RESPA specifically forbids the GFE to include padded numbers. The numbers quoted must, in some cases, be exact, and must always be a truthful representation of the fees to be expected. The condition regarding the worksheet means that they can not pass off or represent any document as a GFE except a real GFE, and are forbidden from having other documents which resemble a GFE. The Kickback Provision is saying that the company can not pay for a referral, which is true, that is an illegal kickback under RESPA. Hope that clears it up, if not, leave a comment, I’ll get you more info.

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