HUD issued amendments to Regulation X to clarify the new Real Estate Settlement Procedures Act rules which became effective on January 1, 2010. The amendments clarify that (1) borrowers must express an intent to continue with the transaction after receiving the Good Faith Estimate, before any fees, except for credit report fees, may be charged, as indicated in the preamble but inadvertently omitted from the regulation text, (2) for all changed circumstances that permit a revised GFE, the changes must increase the charges, (3) the provisions relating to "new home purchases" apply to new "construction" home purchases only, not homes new to the borrower, and (4) settlement services that were listed on the GFE but ended up not being purchased must not be included in the HUD-1 settlement statement, including the comparison chart, to avoid manipulation. The amendments become effective on August 10, 2011. Click here for the amendments.
Alert July 26, 2011