RESPA to roll out a new HUD-1 form. In an attempt to simplify the mortgage process for home buyers, HUD/RESPA has proposed a new HUD-1. In addition, a new standardized GFE(Good Faith Estimate) will be implemented too. All yield spread premiums (YSP's) will be required to be disclosed on the new GFE. The combination of these new disclosures will save mortgage shoppers approximately an average of $668 at the closing table -- an estimated $8.35 billion a year. These savings will most likely come right out of the pockets of loan originators.
These changes by HUD would also create an addendum to the revised HUD-1; prepared scripts are to be read at closing that compare the GFE to the HUD-1. This process would advise borrowers whether changes in promised closing costs (settlement fees) have stayed within HUD's allowable limits -- and verifying that loan terms on the GFE match loan documents such as the mortgage note.
