The US Department of Housing and Urban Development updated its Frequently Asked Questions (FAQ) document for the Real Estate Settlement Procedures Act (RESPA).
The updates address a range of topics ranging from Appraisal Management Companies to requiring verification of documents as a condition of issuing the new Good Faith Estimate.
Below are a couple of the new questions answered in the updated FAQ:
Q: If a mortgage broker provides the initial GFE and the lender accepts the loan, can the lender issue a new initial GFE?
A: No. The lender is bound by the charges and terms disclosed on the initial GFE provided by the mortgage broker.
Q: If an appraisal is ordered through XYZ appraisal vendor management company and the appraisal is subcontracted to ABC Appraisal Company, what name is identified in Line 804 on the HUD-1?
A: XYZ appraisal management company must be identified on Line 804.
Q: If a revised GFE is provided due to changed circumstances or a borrower requested change, must a loan originator complete Line 2 in the “Important Dates” section on the revised GFE if the shopping period has ended and the borrower has already expressed intent to continue with the application?
A: Yes, the loan originator must complete Line 2 in the “Important dates” section with the same date from the last GFE. The borrower is not required to re-indicate the intent to proceed with the revised GFE because the borrower has previously expressed an intent to move forward with the transaction.
There were no updates specifically addressing FHA’s reverse mortgage product. To see the rest of the updates (in bold) click the link below.