By: David van den Berg
Special to The Washington Examiner
September 4, 2010

Closing costs are on the rise both nationally and across the Washington metro area, according to data released this month by Bankrate.com, a financial news and data site.

In the District, assuming a $200,000 loan with a 20 percent down payment and good credit, closing costs are $3,685, according to the survey. That figure means the District has the 22nd-highest closing costs in the country. Last year, the city ranked 41st in the Bankrate.com survey, with a total closing costs figure of $2,502.

“That does not jibe with my experience,” said Adrian Hunnings, president of Palladian One Realty, a Washington real estate firm licensed for transactions in the city, Maryland and Virginia. Title insurance costs have risen in the city, he said, but they have not increased that significantly from 2009 to 2010. Most elements of a property’s closing costs are not contingent on the location of the property, but are more dependent on the value of the property, he added.

Closing costs in Virginia are slightly higher, at $3,883, according to the survey. The state’s ranking dropped from 15 to 19.

I couldn’t talk long enough about the constant roll out of new guidelines affecting home loans on a daily basis. Its certainly an interesting way to start a week  knowing what you know today may be little use to anyone tomorrow! The good new is that everyone is becoming more comfortable with the technicals that have become the new standards resulting from the financial reform act. Some of the better points here are old vs new. Here is one of my favorites.

Old Good Faith Estimate vs. The New Good Faith Estimate

The Old was a general list of fees that varied in style, size, shape, definition of terms, costs etc. A constantly moving target that had no responsibility other than to give you an idea of what the loan terms and costs possibly could be.  The lender was under no obligation to disclose any change in terms, costs, points or fees and buyers were often shocked at closing with little or no options but to close and bear it.

Move over Old and in with the New. The new is actually a very clear and standard form which gives the  the precise costs in one lump sum, broken down between lender charges and title/escrow charges. It must be exact and can not change in any way once disclosed or unless there is a changed circumstance affecting either the costs or the rate. These changes are very specific and the home buyer must be informed a minimum of three working days prior to closing of the loan. The catch here is that lenders can opt to disclose fees from a title/escrow company that the buyer would never use. Since the new laws require most title fees to be shown as the buyers responsibility even if the seller is paying them, the title services can be chosen by the buyer. Choosing to close some place other than the one listed on the Service Providers list on the Good Faith Estimate does not hold the lender responsible to the fees of the selected company. If choosing the title company listed on the GFE then each fee calculated in the title services total must be within a tolerance of 10%. Hallelujah! I’m a huge fan of the new process and how the consumer is given the access to his loan costs upfront. Additionally, the GFE explains important details, like Pre-Payment Penalties, escrow account, interest rate, fixed or ARM, if payment can change etc.

The existing system of mortgage disclosures in the U.S. has long been a disgrace. Borrowers are inundated with garbage disclosures and often the few pieces of critical information they need are either not there or concealed by the garbage.

As an illustration, a large proportion of the people who took option ARMs (adjustable-rate mortgages) during the go-go years leading to the crisis believed that the initial interest rate, in many cases as low as 1 percent, held for five years. In fact, that rate was good for only the first month.

Borrowers taking option ARMs received a booklet about ARMs in general, a description of all ARM programs in which they expressed an interest, and historical or worst-case examples of how ARMs work. But the one piece of information they needed to avoid a horrendous mistake was not there. The default rate on option ARMs today is horrendous, and it is expected to be higher next year.

Unique Cloud Computing Solution Offers Efficient and Affordable Way to Adapt to Ever-Changing Regulations in Real Estate Market

September 02, 2010 07:03 AM Eastern Daylight Time 

ALEXANDRIA, Va.–(EON: Enhanced Online News)–NetLink Resource Group, Inc., a leading provider of custom web application solutions, today announced that it developed the marketing site to support “TitleSphere,” a 100 percent Web-based HUD-1 solution for use by realtors, mortgage lenders, title agents and closing attorneys nationwide, created by Annapolis-based TSS Software Corporation.

“We required a partner who understood the value of developing a marketing site for our cloud-based application”

A key component of promoting the new Web-based solution, NetLink Resource Group developed and designed the online marketing site aimed at driving additional TitleSphere sales leads for TSS Software Corporation. The website can be accessed at www.TitleSphere.com.

“We required a partner who understood the value of developing a marketing site for our cloud-based application,” said Barbara Miller, TSS president and chief operating officer. “As such, NetLink was the ideal partner to provide the development skills and insights required to build out a website that raises awareness of this industry-leading solution.”

OpenClose Releases “GFE Lockdown” for Enhanced Editing Features in Its Loan Origination Software That Greatly Improves GFE Accuracy

WEST PALM BEACH, FL–(Marketwire – August 31, 2010) –  OpenClose Mortgage Software, developers of Web-based, loan origination software, has released the enhanced editing version that improves the accuracy of information flow in the new good faith estimate (GFE). The GFE lockdown “significantly improves” accuracy of loan documents allowing for those lenders to gain better control of 2010.

Regulatory change called for a redesigned GFE this year to — in part — provide borrowers with more detailed closing cost information in order to make better informed decisions. But mistakes, or erroneously changed fees, can create inaccurate applications and non compliant loans. For example, a loan officer might try to waive a charge that the lender stipulates as mandatory.

OpenClose created the GFE lockdown to provide lenders with even greater control by adding the ability to lock down fields in the fee maintenance and closing cost scenarios modules. By checking the “Lock on GFE” checkbox, a loan administrator can freeze the dollar value for that fee and then it cannot be changed on the Good Faith Estimate by any originator or processor.

“The redesigned GFE 2010 provides many more details for prospective homebuyers,” said Jason Regalbuto, President, OpenClose, “but with those details comes more chance for error. Our new GFE lockdown feature provides an extra level of control and therefore, peace of mind.”

I’m for whatever makes the transaction faster and easier. Technology is a beautiful thing – when it works.

OpenClose Releases “GFE Lockdown” for Enhanced Editing Features in Its Loan Origination Software That Greatly Improves GFE Accuracy

WEST PALM BEACH, FL–(Marketwire – August 31, 2010) –  OpenClose Mortgage Software, developers of Web-based, loan origination software, has released the enhanced editing version that improves the accuracy of information flow in the new good faith estimate (GFE). The GFE lockdown “significantly improves” accuracy of loan documents allowing for those lenders to gain better control of 2010.

Regulatory change called for a redesigned GFE this year to — in part — provide borrowers with more detailed closing cost information in order to make better informed decisions. But mistakes, or erroneously changed fees, can create inaccurate applications and non compliant loans. For example, a loan officer might try to waive a charge that the lender stipulates as mandatory.

OpenClose created the GFE lockdown to provide lenders with even greater control by adding the ability to lock down fields in the fee maintenance and closing cost scenarios modules. By checking the “Lock on GFE” checkbox, a loan administrator can freeze the dollar value for that fee and then it cannot be changed on the Good Faith Estimate by any originator or processor.

“The redesigned GFE 2010 provides many more details for prospective homebuyers,” said Jason Regalbuto, President, OpenClose, “but with those details comes more chance for error. Our new GFE lockdown feature provides an extra level of control and therefore, peace of mind.”

I’m for whatever makes the transaction faster and easier. Technology is a beautiful thing – when it works.

eLynx releases HUD-1 compliance tool for its Electronic Closing Network

Tue, 2010-08-31 12:54 — NationalMortgag…

eLynx, a portfolio company of American Capital, has announced that it has released its new eHUD service, a component of the Electronic Closing Network (eCN), that makes it easy for lenders and closing agents to comply with Real Estate Settlement Procedures Act (RESPA) regulations governing Good Faith Estimates (GFE) and the HUD-1.

Recent changes to RESPA regulations limit the differences allowed between the fees disclosed on the GFE and the amounts collected from the borrower at the closing table. These controls require that lenders and settlement agents work closely to negotiate fees and limit differences on the HUD-1 while preparing mortgage documents.

In the past, preparing the HUD-1 was a manual process that required numerous phone calls and faxes. eLynx’s new eHUD service provides a mechanism for lenders and settlement agents to collaborate electronically and in real-time. All parties can quickly and transparently negotiate the fees on a HUD-1 before reaching the closing table. The eHUD service also automatically compares the fees to the original GFE, identifying differences that exceed the allowable amount. This allows lenders and settlement agents to improve their RESPA compliance.

According to Top Producer, 1% of Buyers Find homes by home books, 4% Newspapers, 24% Signs, and 71% by Internet. Because the internet is by far the number one source people look for real estate information, this is where focus and advertising dollars ought to be. Here are five steps to real estate search engine optimization.

* The first step to search engine optimization for real estate websites is the domain name. The domain name is a very important aspect in the Google algorithm. Domain names that have real estate related keywords will rank much better than those that do not.

* Find your keywords. A great tool for finding is simply using the google adwords tool. This tool will show you the keywords that are most used for real estate searches in a particular area, and can help you to decide a keyword rich domain name. These keywords are also important for the content you will add on your real estate website.

* Create Unique Content. One of the best things you can do to get traffic to your website is to write as much content as possible. Search engines love fresh new content, and the articles you write might satisfy a specific question an online looker has. When writing your content make sure you include keywords in your titles, headers, and in the alt tags on images.

If you need help with your website, let me know. art@learntitle.com