First Time Home.us

In case you missed this date, January 1, 2010, the most significant change to the real estate business took place with nary a whimper and little fanfare.

Nonetheless, the way we have disclosed the terms of mortgages to first time home buyers was changed dramatically and as Real Estate professionals it is up to us to embrace these changes (we don’t have a choice) to provide a higher level of service to our clients.

Perhaps the best way to summarize these changes and how they impact our disclosure to homebuyers is to share a real life example:

Here’s something from Mortgage News Daily:

Originators are still grappling with the GFE and RESPA changes. One wrote and said, “This week we sat down with a borrower that is doing an FHA loan. The seller is paying all of the closing costs and as usual the borrower is financing the upfront MIP. Essentially the borrower is coming in with their 3.5% down payment. Our GFE was filled out correctly and yet it showed that the borrower needed $13,850 for closing. Unfortunately the new form does not take into account the fact that the borrower is financing the MIP or the seller credit of $10,000.  When we arrived at the bottom line on the GFE form, the client saw they needed $13,850 to close; they were shocked to say the least. They looked us right in the eye and said, ‘You want us to sign this official looking form, and you’re telling us to trust you that what is written here is not correct?’ We were speechless and must have looked equally as shocked as the borrower seeing a number that was not part of the discussion.  All we could think about was HUD put us in this very uncomfortable position. Ultimately we had to show the borrower a version of the old GFE that shows the seller credit and the upfront MIP being offset by the loan amount. The only benefit for the consumer on this new form is the information on the lock expiration; otherwise we have taken about two steps backward with respect to making the closing process more understandable.” Well said.