Tip 3-2010: New GFE and HUD-1

Effective Jan 1, 2010, all lenders for new loan applications must use a new GFE form and all settlement attorneys must prepare a new HUD-1 for the closing. These new forms are supposed to assist the Borrower with understanding the loan terms and settlement costs. Additionally, these new procedures should increase the accuracy of settlement cost estimates.

In the long run, the new GFE and HUD-1 will probably prove to be beneficial; however, in the immediate term, there are a number of problems and issues with these new RESPA forms and rules. Attached to this email are two memos which discuss the pro’s and con’s of the RESPA changes. (Contact us if you would like a copy of these memos) The memos are “What the Realtor Needs to Know” and “What the Lender Needs to Know” about the New GFE and HUD-1. Please let me know if you think of more information that should be added to these memos.

Please contact me if you have any questions.

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBlaw.com
http://www.tgblaw.com/
http://www.tgblaw.blogspot.com/

Tip 2-2010: More Holidays

The Clerks Offices and Banks are closing again for two more holidays. On Friday, January 15, 2010, they will close for Lee-Jackson Day. Then on Monday, January 18, 2010, they will close again for Martin Luther King Day.

Any closings next week need to happen by Thursday, January 14, and early in the day, if the deed needs to be recorded before the long weekend.

Please contact me if you have any questions.

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBlaw.com
http://www.tgblaw.com/
http://www.tgblaw.blogspot.com/

Tip 1-2010: New GFE and Existing Title and Physical Surveys

It has been previously suggested that the listing realtor ask the Seller for copies of any prior title insurance and surveys (Tucker’s Tip #13-2009). Now with the new GFE (Good Faith Estimate), the lender is required to estimate the total cost for title insurance and if necessary a physical survey.

If the Seller has either of these (they should definitely have prior title insurance and maybe a physical survey), it will assist the lender and the settlement attorney in keeping these costs in line with the estimates on the GFE. In fact, these existing documents may even allow the settlement costs to be less than estimated and not delay the settlement by being out of tolerance. Now more than ever, please provide the Seller’s prior title insurance and existing physical survey to the Selling Agent and the Purchaser’s settlement attorney.

Please contact me if you have any questions.

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBlaw.com
http://www.tgblaw.com/
http://www.tgblaw.blogspot.com/

Tip 51-2009: Holiday Schedule and Clerk's Offices

sThe Clerk’s Offices will be closed all day Thursday and Friday (December 24 and 25). Some will also be closed the last half of the day on Wednesday (December 23). For example, Albemarle is closing at noon on the 23rd, but Charlottesville is open all day.

During the next week, the Clerk’s Offices will be definitely closed Friday (New Year’s Day—January 1). Several Clerk’s Offices (Albemarle and Greene) are planning to close on December 31.

Hopefully any closings and recordings can be handled early in each week to avoid these limited hours. Also you may want to check with the Clerk’s Office you need to deal with to find out exactly what their schedule is on December 23 and December 31.

Have a Happy Holiday!

Please contact me if you have any questions.

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBlaw.com
http://www.tgblaw.com/
http://www.tgblaw.blogspot.com/

Tip 50-2009: New GFE and Tax Map/Parcel Number

One of the new requirements with the new GFE (Good Faith Estimate) is that the lender has to estimate the recording costs of the Deed and Deed of Trust without any variance from the actual recording taxes charged by the local Clerk’s Office.


Most jurisdictions now charge recording costs on the higher of the contract price or local real estate tax assessment. Accordingly, the lender in estimating the recording costs can not just rely on the contract price but must compare it with the actual real estate tax assessment (which in a lot of cases is higher than the contract price).


Accordingly, it will be extremely helpful if all realtors include the accurate Tax Map and Parcel Number in the contract (The correct address and legal names of seller would also be helpful). With this information the lender can check with the local tax assessor as to which value to use for the GFE. Any mistake in this GFE calculation could either cost the lender money or delay the closing.


Please contact me if you have any questions.

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBlaw.com
http://www.tgblaw.com/
http://www.tgblaw.blogspot.com/

Tip 49-2009: Short Sales - New Gov't Rules

The Treasury Department under Obama’s Home Affordable Modification Program (HAMP) has recently adopted sweeping rules to speed up short sales. Some of the changes include: (1) pre-approval of short sale terms by the lender prior to the property being listed, (2) prohibits reduction in the real estate commission, (3) requires the borrower to be released from liability for any deficiency, (4) standardizing of process, documents and timeframes and (5) provides financial incentives to borrows, lenders and investors.

Sounds too good to be true, well it is. There are some “short” comings: (1) new rules do not have to be used by lenders until April 5, 2010, (2) program is voluntary for second mortgages, (3) program appears to only apply to HAMP eligible loans, (4) property must be borrower’s principal residence and (5) borrower’s monthly mortgage payment must exceed 31% of gross income.

At least this is a “first” step in the right direction. It would be great if these new rules speed up the process and allow for early preapproval of a short sale price!! I’ll keep looking for more information; please let me know if you find out anything new as well.

Please contact me if you have any questions.

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBlaw.com
http://www.tgblaw.com/
http://www.tgblaw.blogspot.com/

Tip 48-2009: New GFE and HUD-1

RESPA Reform has required that effective January 1, 2010 all lenders use a revised Good Faith Estimate (GFE) for all loan applications. Additionally all Settlement Attorneys will also use a new HUD-1, which compares the revised GFE to the actual closing costs. These new forms will allow the Buyer to compare and shop for mortgage financing and hopefully limit any increases in the money needed to close from the lender’s original estimate. Needless to say there are going to be numerous issues and problems as these new rules are implemented. These new forms will have a tremendous effect on representing the Buyer in any transaction involving a mortgage loan.

Everyone needs to better understand the issues, the potential problems and hopefully the benefits. There are classes and literature available explaining these changes. If you need any further information about the new GFE and HUD-1 contact your favorite lender or attorney.

Please contact me if you have any questions.

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBlaw.com
http://www.tgblaw.com/
http://www.tgblaw.blogspot.com/

Tip 47-2009: Turkey Tips

Instead of a real estate tip, I thought it would be nice to use this week’s email to wish everyone a Happy Thanksgiving, and provide a few of the memorable calls from the Butterball Turkey Talk-Line:

· A novice turkey-cooking chef wanted to know if the yellow netting and wrapper around the turkey should be removed before roasting. Envisioning a melted plastic turkey blob, the staffer responded, “Yes, unless you like white, dark or plastic,” then offered complete roasting directions.

· White meat, anyone? A young newlywed took turkey preparation to extremes by scrubbing the bird with bleach. Afterward, she called the Talk-line to find out how to clean off the bleach. To her dismay, she was advised to dispose of the turkey and start over!

Have a Happy & Safe Holiday!!

Please contact me if you have any questions.

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBlaw.com
www.TGBlaw.com
www.TGBlaw.blogspot.com

Tip 46-2009: Closing Information

The exchange and flow of information between all the parties in a real estate closing is extremely important to insure a smooth, easy closing for the client. The first information is usually sent by the Realtor and may include various contact and other information on the realtor’s own form and/or on Page 9 of the VAR contract. There are several good forms used by the realtors and lenders which name the various parties (Buyer, Seller, Both Realtors, Lenders, and Settlement Attorney) and their respective contact information.

I am attaching to this Tucker Tip a modified version of several forms which contains blanks for all of the relevant information including names, telephone numbers, addresses, and email addresses. (Contact us if you would like a copy of attachments) I would suggest that all of us involved in the settlement take the time to complete a closing information form (whether it is the attached form or your own) and exchange it among all the relevant parties.

PS—It’s amazing how much time we all will save when we do not look for telephone numbers or email addresses.

PSS—Please let me know if you have other ideas for the closing information sheet.

Please contact me if you have any questions.

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBlaw.com
http://www.tgblaw.com/
http://www.tgblaw.blogspot.com/

Tip 45-2009: New and Expanded Homebuyer Tax Credit

On Nov 6, 2009, the First Time Home Buyer Tax Credit was extended and even expanded. The First Time Home Buyer now has until April 30, 2010 to find that perfect house. Also as long as the contract has been ratified by April 30, 2010, you have until June 30, 2010 to close.

In addition, the Tax Credit (up to $6,500) is available for a current homeowner to move to a new primary residence. (The current homeowner is required to own his current primary residence for five consecutive years during the prior eight year period.) The current homeowner does not appear to have to sell his current house to qualify for this tax credit. Also, there does not appear to be any requirement that the current homeowner has to buy “up”, so he could downsize. Either way, these Tax Credit Extensions should make the winter and spring a little brighter!

Please contact me if you have any questions.

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBlaw.com
http://www.tgblaw.com/
http://www.tgblaw.blogspot.com/

Tip 44-2009: Holidays

The courthouses (Clerk’s Offices) and Banks will be closed Wed, Nov 11 for Veteran’s Day. Also, the Clerk’s Offices, Banks and attorney offices will be closed Thur and Fri, Nov 26 and 27 for Thanksgiving. Most Clerk’s Offices also will close at noon on Wed, Nov 25.

Remember, the closing deadline for the First Time Home Buyer is still Mon, Nov 30, 2009. If at all possible try to close these purchases by Tue, Nov 24 before the long Thanksgiving weekend. To attempt on Nov 30, 2009 to sign all documents, fund the loan and then record could be difficult to complete by the Government deadline.

PS—We are asking each of the Clerk’s Offices to consider “Extended Hours” on Monday the 30th. Also hopefully Congress and Obama may extend the “Credit”. Call your Congressman!! (The Senate has just passed it.)

Please contact me if you have any questions.

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBlaw.com
http://www.tgblaw.com/
http://www.tgblaw.blogspot.com/

Tip 43-2009: First TIme Buyer's Deadline

The “closing” must occur prior to Dec 1, 2009, in order for the First Time Buyer to receive the $8,000 tax credit. With Thanksgiving the week before (the courthouses, lenders and attorneys will be closed Wed [half day], Thur and Fri), the closing must occur either by Tues, Nov 24, or wait until the last possible day Mon, Nov 30. The actual law says the “purchase must occur before Dec 1, 2009”. The term “purchase” according to the Internal Revenue Code means “acquisition”. Several sources note that “acquisition” occurs when escrow closes and title to the property transfers to the Buyer, not when the paperwork is signed. This would mean that the Deed needs to be recorded by Nov 30. What a Confusing Mess!!

Good Strategy: Try to get everything completed prior to Thanksgiving, with anything left over (ex. recording the deed) to be completed on Mon, Nov 30. We all need to work together to try to assist the First Time Buyers with this confusing deadline.

Better Strategy: Write your Congressman for an extension of the First Time Buyer Credit!!

Please contact me if you have any questions.

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBlaw.com
http://www.tgblaw.com/
http://www.tgblaw.blogspot.com/