January 1. Okay, not January 1 but January 2. Sorry, but January 4, the first business day of the New Year. The first day that new RESPA and GFE rules are applied. Gone are the days with the confusing one-page GFE, now we’re welcomed with a more simplified, confusing three-page GFE.
Lenders haven’t been given any real guidance on how to apply these rules, in fact, there isn’t any assurance on which forms actually need to be used to disclose to borrowers their closing costs. There’s the Truth in Lending (TIL) form but the GFE doesn’t break down all the charges in 2010 but instead gives “lump sum” fees. Does that sound better? It probably does, but after presenting the new GFE to 2010 clients, I”ve heard:
“How much is it for title insurance?”
“Why am I charged for owners title policy when the seller is paying it?”
“I thought I cold roll in my MIP. This says I’m paying for it.”
Needless, the new GFE will make your eyes glaze over. I’ve taken three classes on the new forms, one with a group of RE lawyers, and I’m still trying to figure it out.