Big Changes for Mortgage Net Branch Managers in 2010 – Part 2

More about the big changes for mortgage net branch managers in 2010.

There is now a new 4 page GFE (Good Faith Estimate) and new disclosure rules to go with it. The new GFE has you disclosing the figures several different way to (in theory) help the borrower better understand the transaction.

The initial fees that you disclose are now locked in and you cannot change them. Meaning that if you disclose 2% fees on a $200,000 loan ($4,000) and the loan amount changes you are tied into the dollar amount that you disclosed not the percentage.  There is a very small margin of error on some of the fees, but for the most part they are locked in.

The initial fees you itemize on your Good Faith Estimate now must carry over to your HUD-I closing statement.

How you disclose YSP has completely changed. If you are closing the loan as a mortgage broker you will show the YSP as a credit to the borrower, then you will have the borrower sign a mortgage broker agreement  to pay you the YSP.

The YSP like other costs on the GFE cannot change later in the transaction without completely re-disclosing the loan.

There is some ongoing  discussion about how the YSP is disclosed. Bottom line if you are a broker the old method used in many state allowing you to state the YSP as a percentage range (o% – 3%)  and not counting it in the closing costs is no longer legal.

HUD has published a new Settlement Booklet that you must provide to the borrower(s) with in 3 days of the application date .  It covers both the new GFE and the new HUD-I statement. I have provided a link  to the new document.
Settlement Booklet

For branch managers and  loan officers the changing rules continue to make it more difficult to earn a living. The opportunity is in learning work within the new rules. Someone will close that next loan – will it be you!

I always welcome comments and subscribers!

If you would  like to know more about our net branch partner program visit our Frequently Asked Questions page.

mortgage net branch managers in 2010.

Leave a Reply