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Inside Washington (01/03/2010)

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* WASHINGTON (1/4/10)---A new mortgage disclosure rule that went into effect Friday may have some unintended consequences for borrowers and lenders, analysts said (American Banker Dec. 31). The rule requires lenders to give loan applicants good-faith estimates of the closing costs. Lenders also cannot increase some charges during closing, and are limited to a 10% increase on other fees. If the costs of other services--including credit reports and title insurance--are more than estimated, the lender will have to make up the difference. Borrowers are expected to save about $700 from the change in rules, according to the Department of Housing and Urban Development. But some experts said lenders may have to raise their fees to cover the added risk and overestimate third-party expenses in the good-faith estimates. Fred Gooch, vice president of compliance at DocuTech Corp., said one way lenders can control costs is by negotiating contracts with third-party vendors who would be liable for charges that exceed estimates. Also, some lenders who try to avoid being bound by good faith may deny more credit applications to avoid making an estimate, said Melissa Richards, attorney at Buchalter Nemer LLP. However, a lender also could overestimate charges in the good faith estimate, so the costs appear lower at closing, added Richard Andreano, partner at Patton Boggs LLP ... * WASHINGTON (1/4/10)--The Federal Reserve Board has approved amendments to Appendix A of Regulation CC regarding check processing operations. On Feb. 27, The Federal Reserve Bank of Atlanta will transfer its check-processing operation to the Federal Reserve Bank of Cleveland. As of that date, there will be one check-processing region for Regulation CC. Regulation CC establishes the maximum period a depositary institution may wait between receiving a deposit and making the deposited funds available for withdrawal ...