NEW RESPA CHANGES GOING INTO EFFECT

OMG - It's going to be a nightmare come January 1st.  I know it's supposed to HELP buyers and save them hundreds, but it's actually going to cost them money.  I don't think our elected officials really understand how these new rules are going to affect things.  I'll be the 1st to say there were a lot of predatory lenders out there and they needed to implement change.  Evil people will always find a way to be evil, don't penalize everyone for their actions.

With these new rules, I, as a lender, will most likely end up paying for things I have no control over.  I have to "estimate" what I think costs will be and there can be little or no change from my estimate to the final closing figures!  I know what MY figures are, but I don't know what a seller's title insurance will cost when I meet with a buyer. 

These changes will result in lenders severely OVER ESTIMATING costs just to make sure they don't end up paying the difference if costs of others involved in the loan come in higher. 

Buyers are supposed to take the estimate from one lender and SHOP with several others.  To effectively shop with a lender we have to know what your credit score is, and each time a lender checks your credit it lowers your score.  The rate you get is dependant on credit score and if people are out checking with several lenders this could, in all reality, cause their score to lower to where they can't get a mortgage. 

What it all boils down to is talk to people, find out who they trust and would refer you to, and DEAL WITH A REPUTABLE LOAN OFFICER who's been in the lending business for years like I have. 

I've seen a lot in 23 years of lending.  I have always quoted people high on closing costs.  One of my pet peeves has always been lenders who will under-estimate the costs to trick borrowers into going with them because their costs are higher.  One thing the new changes will do is stop this.  If they underquote, they pay the difference!

Here's to a challenging and great 2010!