How to Use HUD Settlement Cost Booklet As a Sales Tool Thirty-six years waiting ... its got to be good by karen deis
T
he year was1974, the first time HUD required a uniform, standard closing statement (HUD1) and a Good Faith Estimate. Not much had changed since then—but expect 2010 to be the year the mortgage industry, as we know it, changes forever. After waiting almost six months for the new HUD Settlement Cost Booklet, it was finally released on Dec 16, 2009 (HUD’s website) and incorporates the new GFE, HUD 1, MDIA disclosure dates. The entire mortgage application, closing and servicing (the loan) process is all explained in a 49-page booklet and I venture to say—it’s really GOOD! This booklet protects you, the loan originator and mortgage company manager! Pretty much everything clients need to know is covered—so clients can not come back to you and say—“you never explained that to me.” Some “experts” say that the booklet is required to be given ONLY to someone who is purchasing a home. I disagree. In the Mortgage Disclosure Improvement Act, it specifically lists the transactions that require disclosures and we believe that they renamed the booklet “Shopping for Your Home Loan…” for a reason! Rule Synopsis: HUD released new Settlement Cost Booklet called “Shopping for Your Home Loan.” Give to clients on January 1, 2010. Give to clients for the following loan transactions:
• Purchase – Primary & 2nd Homes, Condos, Townhomes • No-cost loans • Construction/End Loans • Refinance of primary & 2nd home • Closed End HELOC’s • Time Shares • Manufacture Homes/Mobile Homes on Real Property • Mortgage Assumptions (if loan terms change from original mortgage) • Reverse Mortgage Not required for: • Rental Property that will be used for Business Purposes • Land • Land & Home with 25 acres or more • Seller-Financed Mortgage or Contract-for-deed • Loan Modifications • HELOCS – open end • Loan application denied – at application o Or if borrower withdraws within 3 days of loan application Can change the Cover ONLY – no alterations to the content; • OK to change picture, add your company name & contact info to cover page • Can be translated to languages other than English Must be SENT three business days after the signed loan application - continued on page 46 TheNicheReport.com
23