- A Unique Guidance Booklet, which contains consumer information regarding various real estate settlement services (required for purchase transactions only). To view this booklet online, see Required Booklet: Buying Your Home, Settlement Costs and Information .
- A Good faith Imagine (GFE) of settlement costs, which lists the charges the buyer is likely to pay at settlement. This is only an estimate and the actual charges may differ. If a lender requires the borrower to use a particular settlement provider, then the lender must disclose this requirement on the GFE.
- A Financial Upkeep Disclosure Report, which discloses to the borrower whether the lender intends to service the loan or transfer it to another lender. It also provides information about complaint resolution.
In the event your consumers don’t found these types of records at the time of application, the lending company need to mail them inside three working days out of searching the loan application. Should your financial transforms on the financing contained in this three days, not, upcoming RESPA doesn’t need the lender to incorporate this type of documents.
The fresh new RESPA statute does not render a specific punishment toward inability to offer the Unique Recommendations Booklet, Good-faith Estimate otherwise Home loan Upkeep Report. But not, bank authorities might want to demand penalties to your lenders which fail to adhere to federal legislation. To learn more, discover RESPA: Protections and you will Enforcement.
Disclosures ahead of Payment/Closure Occurs
Connected Business Arrangement (AfBA) Revelation This disclosure is required whenever a settlement service provider involved in a RESPA covered transaction refers the consumer to a provider with whom the referring party has an ownership or other beneficial interest. The referring party must give the AfBA disclosure to the consumer at or prior to the time of referral. The disclosure must describe the business arrangement that exists between the two providers and give the borrower an estimate of the second provider’s charges. Except in cases where a lender refers a borrower to an attorney, credit reporting agency or real estate appraiser to represent the lender’s interest in the transaction, the referring party may not require the consumer to use the particular provider being referred.
HUD-1 Payment Statement This is a standard form that clearly shows all charges imposed on borrowers and sellers in connection with the settlement. RESPA allows the borrower to request to see the HUD-step 1 Settlement Statement one day before the actual settlement. The settlement agent must then provide the borrowers with a completed HUD-1 Settlement Statement based on information known to the agent at that time. For a sample HUD-1, see: Blank HUD-1 Settlement Statement; for descriptions of various sections, see: HUD-1 Section J (lines 100-303) and HUD-1 Section L (lines 700-1400).
Disclosures in the Settlement
HUD-1 Settlement Statement At closing, the HUD-1 shows the actual settlement costs of the loan transaction. Separate forms may be prepared for the borrower and the seller. Where it is not the practice that the borrower and the seller both attend the settlement, the HUD-1 should be mailed or delivered as soon as practicable after settlement.
1st Escrow Report This document itemizes the estimated taxes, insurance premiums and other charges anticipated to be paid from the Escrow Account during the first twelve months of the loan. It lists the Escrow payment amount and any required cushion. Although the statement is usually given at settlement, the lender has 45 days from settlement to deliver it.
Disclosures immediately after Payment
Annual Escrow Report Loan servicers must deliver this statement to borrowers once a year. The annual escrow account statement summarizes all escrow account deposits and payments during the servicer’s twelve month computation year. It also notifies the borrower of any shortages or surpluses in the account and advises the borrower about the course of action being taken.
Servicing Transfer Report This document is required if the loan servicer sells or assigns the servicing rights to a borrower’s loan to another loan servicer. Generally, the loan servicer must notify the borrower 15 days before the effective date of the loan transfer. As long the borrower makes a timely payment to the old servicer within 60 days of the loan transfer, the borrower cannot be penalized. The notice must include the name and address of the new servicer, toll-free telephone numbers, and the date the new servicer will begin accepting payments.
