Loan originators using Calyx Point will soon have access to ClosingCorp’s SmartGFE service, allowing them to compare actual rates offered by title insurance companies and other settlement services providers at the national, regional and local level.

The integration of the SmartGFE service into Calyx Point in November will help loan originators comply with changes to the Real Estate Settlement Procedures Act (RESPA) taking effect Jan. 1, ClosingCorp said.

Calyx Software claims to be the No. 1 provider of mortgage solutions for banks, credit unions, mortgage bankers and brokers. With the integration of ClosingCorp’s SmartGFE service, loan originators using Calyx Point will be able to access the rates of participating settlement service providers at ClosingCorp’s Web site,

The SmartGFE service provides rates and vendor information directly from title insurance, home and pest inspection, appraisal, notary and home warranty services companies, allowing originators to create a good faith estimate (GFE) that’s based on current rates from a single, neutral source, ClosingCorp said. will also provide property taxes, transfer taxes and recording fees for each transaction.

Beginning Jan. 1, the Department of Housing and Urban Development (HUD) will require that loan originators use a standardized GFE form that’s designed to help consumers comparison shop and protect them from "bait and switch" tactics by loan originators.

When loan originators select title insurance or other settlement services for borrowers, the estimated charge for those services listed on the GFE will not be permitted to increase by more than 10 percent at closing.

Estimated loan origination charges quoted to the borrower on the GFE can’t change at all, and mortgage brokers must disclose yield-spread premiums to borrowers and credit them against their closing costs. …CONTINUED

If borrowers take advantage of their ability to comparison shop, they could save nearly $700 a loan, HUD estimates — $470 on loan origination fees, and $198 on settlement services.

But the new rules also pose administrative and compliance challenges that HUD estimates will cost the industry hundreds of millions of dollars.

HUD estimates that in order to comply with the RESPA rule changes, loan originators and settlement services providers will incur up to $571 million in one-time compliance costs, including $153 million for software, $153 million for legal consultations, and $265 million for training. Recurring costs are estimated at $918 million a year, or $73.40 per loan.

The Federal Reserve has also proposed revisions to loan disclosure forms required under the Truth in Lending Act (TILA), including an outright ban on yield-spread premiums, which are rebates paid by lenders to mortgage brokers when those brokers place borrowers in high-interest-rate loans (see story).

The real estate industry has urged HUD and the Fed to work together to create a single set of loan disclosure forms that meet both RESPA and TILA requirements.

The duties of a Consumer Financial Protection Agency proposed by President Obama would include taking over responsibility for enforcing RESPA from HUD, and developing a uniform mortgage loan disclosure form and putting it forward for public comment within a year of its formation (see story).


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