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Important Information Regarding CHFA Second Mortgage Good Faith Estimate and HUD 1

The RESPA Rules for the new Good Faith Estimate (GFE) and new HUD-1 Settlement Statement (HUD-1) take effect on January 1, 2010. Although compliance with these requirements is the responsibility of Participating Lenders, we want to emphasize some provisions of the Rules.

First Mortgage Loans

• On all first mortgage loans the originating lender must provide the customer with the appropriate GFE and HUD-1 forms



• HUD has provided guidance in Mortgagee Letter 09-53 and FAQ's which may be found at http://www.hud.gov/offices/hsg/ramh/res/resparulefaqs.pdf



• CHFA limits the origination fee to 1 percent of the first loan amount. Any excess origination fee must be returned to the borrower.



• CHFA requires Participating Lenders to provide detailed information to specify distinct origination fees and charges on the HUD-1. Lenders should itemize these origination-related fees and charges in the empty 800 lines of the HUD-1, to the left of the column. All allowable, non-third party pass-through lender fees (underwriting, processing, document preparation, etc.) are limited to $600. Please see Chapter 1 of the CHFA Seller's Guide for detailed information.



• It is important to fully and accurately complete the GFE and HUD-1 and ensure that any increase of charges between issuance of the GFE and settlement are authorized by the RESPA Rules. If you have any questions, we encourage you to contact HUD or your legal counsel or compliance staff.

CHFA Second Mortgage Loans

The RESPA Rule for the new GFE and HUD-1 is required for all “federally related” mortgage loans, as defined by RESPA. CHFA has determined that our second mortgage loans currently do not fall under the definition of “federally related” and therefore do not require a GFE or a separate HUD-1. The First Mortgage Loan is a “federally related” mortgage loan and is subject to the new GFE and HUD-1 requirements.

On January 1, 2010, CHFA will remove the following GFE forms from our website and as a requirement on our submission vouchers:

• CHFA Form 332, Second Mortgage (Interest Bearing) Good Faith Estimate
• CHFA Form 362, CHFA JumpStart2 Second Mortgage Good Faith Estimate
• CHFA Form 302H, HomeAccess Second Mortgage Good Faith Estimate
  

Please do not provide these documents to potential borrowers or include these documents in the loan files delivered to CHFA.

Please contact the Home Finance Division with any questions.

303.297.7376 or 1.888.320.3688 Denver
970.241.2341 or 1.800.877.8450 Western Slope
 

Thank you,
CHFA Home Finance