Developers Push RESPA Updates As New Year Nears
Mortgage software developers are rushing updates onto the market to meet Real Estate Settlement Procedures Act (RESPA) compliance requirements before the New Year, when changes to RESPA come into effect. Avista Solutions finalized a system update to its loan origination software (LOS) for RESPA compliance that will be available in time for the Jan. 1, 2010 deadline. To Avista, most consumers are concerned that the initial transaction detailed in the Good Faith Estimate (GFE) will change by the time the loan is closed, making room for unexpected fees to show up on the HUD-1 Settlement Statement. Under the new rules, the documents must be consistent and any changes must be supported by circumstances in the loan. For example, if the interest rate or amount financed changes, additional fees can be incurred. This change must be re-disclosed and specified in the settlement statement. Avista Solutions’ side-by-side comparison screens allow uses to check for discrepancies between the GFE and the HUD-1. Applied Business Software (ABS) updated its Mortgage Office software to help loan originators with RESPA regulations, calculate and print compliant documents. As a result of the new changes, loan originators will be required to print new forms, including a disclosure of key loan terms, closing costs, yield spread premiums, the GFE and the HUD-1. The developer Dexma also joined in the rush toward RESPA compliance. To allow its customers to comply with the regulations, it made changes to its web-based mortgage platforms. Fees, loan terms and important dates that appear on the new GFE and HUD-1 screens can all be configured, and a new GFE screen allows originators to compare loan amounts, interest rates and points disclosed to the borrower. According to ABS, the new requirements will affect nearly 500,000 loan originating professionals and millions of mortgage loans in 2010. Earlier in the month, Byte Software released a RESPA update to its LOS offering. Write to Jon Prior.