HUD issued a proposed rule aimed at improving the disclosure requirements for mortgage settlement costs under the Real Estate Settlement Procedures Act. Among other things, the proposal would:
- standardize the GFE;
- require page one of the GFE to provide a summary of the loan terms and total settlement charges;
- include disclosure of yield spread premiums in the GFE;
- facilitate comparison of the GFE and the HUD–1/HUD–1A Settlement Statements;
- help ensure that borrowers are made aware of final loan terms and settlement costs at settlement, by reading and providing a copy of a “closing script” to borrowers;
- clarify HUD–1 instructions;
- clarify and update escrow account requirements and mortgage servicing transfer provisions;
- clarify current regulations on discounts and explain when RESPA permits certain pricing mechanisms, such as average cost pricing and volume discounts, that benefit consumers;
- amend the definition of “required use” to include incentives for the use of a particular service provider, for example builder discounts for using an affiliated lender; and
- make clear that all RESPA disclosures may be provided to consumers in electronic form, so long as the E-Sign Act requirements are met.