South Carolina Real Estate Law Blog

The U.S. Department of Housing and Urban Development (HUD) says it will, for 120 days, ”exercise restraint” in enforcing the Real Estate Settlement Procedures Act (RESPA) regulatory rule set to take effect January 1, 2010. The ”final rule“ will require, among other things, that lenders provide borrowers with new Good Faith Estimate (GFE) which HUD hopes will more clearly disclose loan terms and closing costs. In addition, settlement agents will be required to provide a new HUD-1 Settlement statement which will compare borrower’s final costs versus their estimated costs.

The new rules, which HUD estimates will save consumers an average of $700 in settlement costs, went into effect at the beginning of 2009, but provided for a one-year transition period for incorporation of the changes. HUD says it will restrain against enforcing these rules against service providers “who demonstrate a good faith effort” towards implementation.  Among other things, the lender will look at whether the service provide has made “sufficient investment and commitment in technology, training, and quality control designed to comply with the new rule” in determining whether or not a good faith effort has been made.

A copy of HUD’s press release is available online.  You can also visit their website for more information and answers to frequently asked questions.