http://www.mortgagenewsdaily.com/3142008_RESPA_Changes.asp
I was facinated with this article earlier today. I guess when you are a real estate agent working on other people's projects you don't really pay attention to closing costs until it's your turn to okay the agreement. There were points I completely agreed with, e.g. "It consolidates closing costs into major categories to prevent "junk fees" and displays total estimated settlement charges prominently on the first page so the consumer can easily compare loan offers. In addition, HUD's new proposed rule would specify the charges that can and cannot change at settlement. If a fee changes, HUD proposes to limit the amount it can change. Modifications to modify the HUD-1 settlement statement are mainly to assist consumers to compare actual charges on the HUD-1 with prior estimates on the GFE."
Then there were points that I didn't agree with, like the proposed mandatory "closing script." As a Notary Public, I would have to get out of the Signing Agent business as I am prohibited from explaining the loan documents to the customer. I am only supposed to witness, notarize and return the loan documents to the client who is contracting the mobile notary service. As an independant contractor providing an array of services, this spells trouble with a capital T. Did anyone ever stop to think of all the conflicting state laws that prohibit certain licensed individuals from doing certain things?
What if the customer asks the loan siging agent a question during the closing portion of the mandatory script being read? What if I know the answer, but as a Realtor and Notary Public am prohibited from answering per state law, but am required to point out the answer in the documents by the new HUD requirements? Do I loose my two licenses for complying? Do I get fined or sanctioned for not complying?
The end of the article has a link where you can read the entire nightmare on the HUD website. I don't think RESPA intended to kill the entire Notary Signing Agent business, but they may have just signaled the beginning of the end... What say you?
This is typical of the Law of Unintended Effects, where people who don't understand how business works write laws that overcontrol the process.
I wonder how it will affect the title business in Metro Detroit. I think it is good that there are no major changes in fees. So many loan officers, lenders, and banks intentionally leave off some fees so they can't be compared.
Hi Brian and Russ,
Thank you for taking the time out to comment. Unintended effects indeed! It will be very interesting to see how this will affect the business models of the various entities engaged in real estate transactions. It will also be interesting to see how the states respond when they alter their policies and procedures in response to the updates eventually enacted. Regards, C.
The National Notary Association is mounting opposition to that proposed portion of the RESPA reform because if enacted it will prohibit Notary Signing Agents in every state from coming to the table.
http://www.nationalnotary.org/news/index.cfm?Text=newsNotary&newsID=1386