Their intention is to make it easier for buyers to understand what they are getting when they apply for mortgage financing - and to minimize unwanted surprises at the closing table with potentially different (higher) charges on the HUD-1 than what was stated on the GFE.
Scott Rinn, a senior policy analyst with NAR, thinks the new forms will be easier for consumers to understand and that the tolerances [HUD’s term for how much costs can change between the GFE and the HUD-1] at least in theory, should reduce closing-table surprises. The degree of these improvements will discovered over time.
The forms are not particularly intuitive and will need further clarification. Even so, the consensus is that these changes are for the better and (as with most things) will continue to improve over time.
The attached video Changes to GFE and HUD Statement (led by Scott Rinn, our RESPA guru) gives perspective page-by-page on the changes within the two forms that took effect January 1, 2010.
Please contact me with any questions you may have regarding these new RESPA forms.
