Scotsman Guide - May 2010 Residential Edition

By Anthony F. Geraci Managing partner Geraci Law Firm

4 Compliance Questions to Answer Now o i nce Questio s to A we o
What you don’t know about changes to the GFE and fees could bite you back

As regulations increase, it’s time to ask yourself some important compliance questions. The answers can help you strengthen relationships, develop a set of best practices for filling out good-faith estimates (GFEs) and stay out of trouble.

1. Are my fees fixed? Under the Real Estate Settlement Procedures Act ( RESPA), there is now a zero-tolerance policy for origination-fee changes. Brokers can no longer charge separate processing fees, wire fees, etc.

You can include other fees you used to charge in your new origination fee, though. You also might consider building in a buffer, just in case. Remember: You can charge less than you list on your GFEs but not more.

2. How can I change my fees? After
you deliver clients a GFE, you can re-
disclose a GFE only if there are changed
circumstances. Valid reasons for
changed circumstances include inaccu-
rate borrower information, discovery of
environmental problems, boundary dis-
putes, litigation, the need for flood in-
surance, or acts of god, war or disaster.

Anthony F. Geraci, managing partner of Geraci Law Firm, is a leading expert in real estate finance law and designs mortgage pools and funds. He advises mortgage brokers and lenders on federal and state lending and licensing laws. He has created more than $10 billion in mortgage pools and other security offerings, and he also advises clients on real estate finance compliance issues. Reach Geraci at (949) 379-2600 or anthony@geracilawfirm.com.

We are a large Mortgage Lender offering a number of exciting opportunities, and have successfully converted many Mortgage Brokers into profitable Retail Branch facilities up and down the eastern seaboard.