Developers of the real estate closing software application Easy HUD say it will soon support the new loan disclosure forms and settlement procedures mandated by the Department of Housing and Urban Development.
HUD published its long-awaited final rule Monday governing enforcement of the Real Estate Settlement Procedures Act, or RESPA (see story). HUD estimates the new forms and procedures will save consumers $8.35 billion a year by helping them shop for the best deal on a mortgage and settlement services such as title insurance.
Although some provisions of the new RESPA rule are scheduled to take effect Jan. 16, loan originators have until Jan. 1, 2010, to switch to a new standardized Good Faith Estimate (GFE) and HUD-1 settlement statement.
Easy HUD’s developer, North Brunswick, N.J.-based Easy Soft, says it’s been monitoring the seven-year-long evolution of the new RESPA requirements, and that the application is already being updated. The application will support both old and new RESPA requirements during next year’s transition period, the company said.
Easy HUD users enter the required information for a transaction, and the application performs all necessary calculations, including embedded transfer charges for 40 jurisdictions. All prepared documents including the HUD settlement statement forms can be saved in PDF or Word format and e-mailed from the program, and closing transactions can be exported automatically to Easy Trust or QuickBooks.
HUD estimates that it will cost lenders and settlement services providers $571 million to become compliant with the new rule, including $153 million for software upgrades and related training. The industry is expected to spend another $153 million on legal consultation and $265 million training employees on how to follow the new regulations.
Settlement services providers — including direct title insurance carriers, title abstract and settlement offices, and lawyers — could rack up $62 million in expenses to upgrade software and train employees to use it. Of that total, $14 million would be spent on software upgrades and $48 million on training, HUD estimates.
Loan originators who use applications like Byte Software Inc.’s Bytepro Standard to calculate maximum loan amounts might incur $91 million in expenses for software upgrades and related training, HUD estimates. The cost of loan orginators’ software upgrades is expected to total $33 million, while expenses for software-related training could total $58 million.
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