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By W. Troy Swezey
Home buyers are often confused about where to begin in their search for a home
loan. The process is usually narrowed down to finding which institutions
provide the lowest settlement costs, but the different types of lending
institutions and the variety of lending programs available can make the
search a slow, difficult experience.
Real estate settlement costs are fees buyers normally pay when purchasing a
home such as legal services property insurance, mortgage loan financing and
title services. In the past, consumers would have to call each lender,
request an estimate of their settlement costs and compare all of the results
to find which lender offered the lowest total settlement costs.
The Department of Housing and Urban Development, however, recently revised the
Real Estate Settlement Procedures Act (RESPA) which now makes it easier for
consumers to estimate various settlement costs through computer loan
origination programs. In this manner, consumers can access a computer listing
of various programs offered by lending institutions.
The computer search speeds the process of reviewing various programs and
allows participants to arrange financing with the listed lender. Buyers using
a computer loan origination program may be required to pay a fee for this
service, but many buyers feel the convenience outweighs the cost. Still, the
new RESPA changes require a real estate broker with a computer loan
origination program to inform the buyer that the service is only an option
and that non-listed lenders may offer lower rates or fees.
The new Federal Regulations also permit real estate brokers to offer more
comprehensive services to home buyers by allowing brokers to enter into
controlled business arrangements with other companies associated with the
home buying process. Real estate brokers were always allowed to refer buyers
to lending institutions, title companies and escrow companies, but they were
not permitted to accept compensation from those institutions for giving a
referral. The RESPA changes now allow real estate brokers to enter into
partnerships or actually open their own mortgage service institutions. This
allows brokers to provide virtual “one-stop shopping” by handling the entire
settlement process.
RESPA changes were made to help home buyers learn about and obtain mortgage
services more conveniently. Since RESPA helps consumers to understand the
process of home ownership, the regulations may encourage more potential
buyers and further stimulate the real estate market.
W. Troy Swezey is the author of “COMPARING THE TRUE COST OF OBTAINING A HOME
LOAN." As a Realtor at Century 21 Paul & Associates, he has helped many
individuals with their real estate needs. Visit his web site to download his
free e-book, “REAL ESTATE SECRETS EXPOSED.” http://www.TroyIsMyRealtor.com
(http://www.TroyIsMyRealtor.com) or mail to: TroyC21@usa.net
(mailto:TroyC21@usa.net)
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