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Washington
Compliance Good faith estimate round up
WASHINGTON (1/28/10)--In examples drawn from this month's Compliance Challenge, the Credit Union National Association (CUNA) addresses issues surrounding Good Faith Estimates (GFEs). In one example, a member who received a mortgage loan GFE from a credit union notices that the address of the property to be purchased is missing from the GFE. Would adding the missing address constitute the type of “changed circumstances” that would require the credit union to issue a revised GFE? According to the Real Estate Settlement Procedures Act (RESPA) FAQs, the later identification of a missing property address would not be considered a “changed circumstance” to justify the need to issue a revised GFE. However, an incorrect address on the GFE, and the subsequent correction, would be considered a “changed circumstance” that would require issuance of a revised GFE. Another Compliance Challenge question asks if a mortgage representative should provide a member with a written list of providers if the credit union does not allow its members to shop for settlement services. According to the RESPA FAQs, the mortgage rep is not required to provide a written list of providers to the member, as the member is not permitted to shop for settlement services providers under the terms of the mortgage contract. The credit union would complete item #3 on page 2 of the GFE with all third party settlement services, other than title services, that the credit union requires and select the provider of those services, which can include appraisal services, credit reports, tax services, flood certifications and up-front mortgage insurance premiums. In another example, a mortgage representative from a separate FCU is unsure whether or not items that are to be paid outside of closing in relation to a member’s loan should be documented on the GFE. According to CUNA, RESPA does not provide a place to document paid outside of closing (POC) items. However, POC items that are paid by the borrower, seller, loan originator, real estate agent, or any other person must be included on the HUD-1, and appropriately marked POC. These items must also be excluded from the computing totals, and whether the buyer or seller paid these charges should also be marked on the settlement statement. For more of the compliance challenge, use the resource link.


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