New Reverse Mortgage RESPA Requirements

New Reverse Mortgage Lender Requirements

January 1st 2010 was an important time for Reverse Mortgage Lenders. Real Estate Settlement Procedures Act or RESPA amendment was changed for all FHA loans and there are now some new protections. These protections are built in to the changes to protect the borrower from improper increases in closing costs for the borrower. This article will explain how these changes in the RESPA will affect your financial future, and how it has made the very safe Reverse Mortgage, even safer.

Before this new change in RESPA, a major complaint of Reverse Mortgages was how closing costs were handled. Originally, all figures of a qualified estimate or quote were always subject to a later appraisal value. Any figures given to you before the appraisal is completed are only estimates and not valid. It was possible for lenders to drastically change these closing costs. Some of the closing fees could be double, or removed entirely, and the problem was that the borrower or prospect would have no way on knowing until the processing was completed and the final closing documents were to be signed.

Obviously the flaws in the previous system needed to be addressed and thanks to these current changes in the RESPA Requirements, Lenders now have much stricter regulations governing the way that these fees and costs are disclosed to their clients and prospects. Now when a loan officer, professional, or a loan originator creates an estimate for a customer, those fees are now binding. You will not be required to submit to uncertainty in the future of your loan. These numbers are now valid through the end of your processing time, and it removes the temptation for dishonest or disreputable predatory Reverse Mortgage Lenders from unethically raising the costs of an individual's loan.

RESPA has limited the amount that certain fees or costs that have an actual fluctuation from case to case by very reasonable percentages. For example, the fee for the appraisal can be disclosed at a certain level, and then by the RESPA's permission, increase by a maximum of 10% of the initial amount listed on your Good Faith estimate. This is now defined and regulated for the borrower's protection.

These are positive changes that will make one of the safest senior products ever created, even safer. The Lender is now much more defined on their fees, and processing system. The borrower is not going to be surprised at closing, and the whole process will be more streamlined and safe. To learn more about these changes, contact a specialist at ReverseMortgageNation.com today!