The new RESPA (Real Estate Settlement Procedures Act) reforms will take place on January 1, 2010, although each lender can choose to implement the reforms prior to January 1^st. The purpose of the changes according to HUD  to help consumers shop for the lowest cost mortgage and avoid costly and bad loan offers. Lenders and mortgage brokers will be required to provide consumers with a standard "œGood Faith Estimate" ("œGFE") that must outline key loan terms and closing costs. HUD claims that these new regulations will save consumers nearly $700 in closing costs. HUD officials say they carefully considered concerns from each corner of the mortgage market and that HUD balanced the needs of consumers, with those in the industry.  In addition, HUD says it wants to attempt to reduce the misunderstanding and confusion from the "œfine print"of the mortgages and claims this  "œmisunderstanding"is at the heart of the mortgage crisis. Thus, greater disclosure and the lowering of costs is behind these changes, although frankly, the minor savings and HUD's interpretation as to what is behind the mortgage crisis is somewhat astonishing. Do you agree with   this analysis?

HUD will require mortgage lenders and brokers to provide borrowers with an easy-to-read standard GFE that will addresss fundamental issues such as: what is the term of the loan; is the interest rate fixed or can it be changed; is there a pre-payment penalty; is there a balloon payment; and what are the total closing costs. The GFE will consolidate closing costs into major categories to prevent "œjunk fees"and display total estimated settlement charges prominently on the first page so the consumer can easily compare loan offers. There will be restrictions on variations between the GFE and the final closing statement and the lender may have to pay the borrower money back within 30 days from the date of closing to correct errors or violations for overcharges if the variation exceeds acceptable boundaries The GFE will have to be provided to the potential borrower within 3 days of receiving necessary information and loan originators cannot require verification information until the applicant actually makes a decision to proceed, so as to avoid incurring unnecessary costs.