In 1975, U.S. Congress enacted the Real Estate Settlement Procedures Act, RESPA, in an effort to provide full and proper disclosure of settlement costs to homebuyers and sellers under the jurisdiction of HUD. Now regulated by the Consumer Financial Protection Bureau, CFPB, because of the Dodd-Frank Wall Street Reform and Consumer Protection Act, RESPA also helps eliminate other abuses and less than honorable practices that can occur during property settlement processes.
One of the most important stated objectives with RESPA Rules is to bring about much needed transparency in the real estate closing process. While the GFE-HUD comparison sheet requirement certainly had pressed lenders and settlement services providers to quote their fee much more accurately, there is still an element of opacity.
As part of the new rules, lenders and settlement service providers are no longer allowed to itemize “administrative fees.” The rule applies to all settlement service providers, whether they are on the lender provided list or not. Now, in the normal course of business, consumers would want to see an itemized list of charges, especially because the HUD Settlement Statement does not allow for itemization. If the goal is transparency, then breakdown of lender’s origination cost, title fee, closing fee, etc. must be visible.
What’s the solution? We believe we have the answer. Easysoft’s real estate closing software produces the required lump sum of settlemnt charges for both buyers and sellers that are fully itemized on page 2 with the ability to customize entries. Closing attorneys actually fill-in the itemization and the software calculates the total settlement charges on the HUD in the proper places. Real estate lawyers can also print the itemization sheets separately. So, the bottom line is, HUD forms, including the Truth in Lending and the Closing Disclosure, will get a lump-sum value and with Easysoft’s closing software, and closing professionals can provide clients with a more informative breakdown.
If you are not currently an Easysoft Real Estate Software user, schedule a demo today and qualify for a free 7-day trial.
