A Lesson on the GFE Tolerance Cure

March 25, 2015 admin Leave a comment

What is the GFE tolerance cure? It is a term that is often met with confusion from those who lack familiarity with the real estate industry as a whole. There are some novice entrepreneurs in real estate and the title industry who may not yet have come across this concept in their line of work, yet it is crucial that they are familiarized with it.

The GFE tolerance cure is an incredibly important federal policy that one needs to have a full understanding of when working from within this field. This is how the government looks to protect its consumer population. The fact of the matter is that the tolerance cure inherently circumvents the possibility of a borrower paying back more than what is owed on any closing costs on a deal.

In other words, the GFE tolerance cure actually improves the overall customer experience for borrowers by protecting them from the possibility of being dealt any surplus charges by their lenders. While this serves as a grossly simplified explanation for what the policy actually entails from a legal standpoint, having a full understanding of how the tolerance cure works makes it an asset for title industry professionals.

Contact Acuity National Real Estate Solutions, LLC, a Freibert & Mattingly Title Group LLC company, at (502) 238-7500.? We provide our clients with the best of both worlds?old-fashioned professional excellence supplemented by the cutting edge technology necessary for an optimized process and smooth, speedy transactions. In today?s market, you need an agile title and closing partner that can still keep its feet on the ground.? To learn more about Acuity?s services, visit www.ftgclosings.com.

Tolerance Cures and the Good Faith Estimate: Part III

March 16, 2015 admin Leave a comment

When a lender is preparing a good faith estimate, the financial institution will create a list of additional costs, and each fee is associated with a level of tolerance. The costs can be related to numerous services, such as appraising the property, initiating a wire transfer, homeowner’s insurance, analyzing the borrower’s credit report, underwriting the loan and title insurance. Here, Acuity provides the third of four parts to clearly define Tolerance Cures and the Good Faith Estimate.

Choosing an Attorney

Some lenders will provide a list of lawyers who can create and modify the terms of the loan and the closing statement. If the buyer chooses an attorney that has been approved by the financial institution, the costs are subject to a tolerance of 10 percent. When the borrower selects a lawyer that was not on the lender’s list, the attorney’s fees are not associated with any tolerance.

Creating Records

Once a state government records information about the property transfer, the agency typically charges a fee that is less than $700. This cost is associated with a tolerance of 10 percent.

Evaluating the House

An experienced inspector will generally analyze the foundation of the home, the roof, the insulation, the siding, the windows and the house’s plumbing, and in some cases, the individual may create a list of the estimated prices of necessary repairs. The costs of the evaluation usually do not have tolerance, but if the inspector has been chosen by the lender, the total price of the services has a tolerance of 10 percent.

Homeowner’s Insurance

An extensive analysis showed that more than 20 percent of lenders help buyers to obtain discounts when the borrowers purchase an insurance policy for the property. The monthly price of insuring the home does not have tolerance.

Independent Appraisals

Generally, the costs of valuating the house are not associated with tolerance. In spite of this rule, some companies will provide written guarantees that indicate that their prices will not change after a GFE has been provided.

In today?s market, you need an agile title and closing partner that has its feet on the ground. Contact Acuity National Real Estate Solutions, a Freibert & Mattingly Title Group LLC company, today at 502.238.7500. To learn more about Acuity?s services, visit www.ftgclosings.com.

Tolerance Cures and the Good Faith Estimate: Part II

March 4, 2015 admin Leave a comment

When a lender is preparing a good faith estimate, the financial institution will create a list of additional costs, and each fee is associated with a level of tolerance. The costs can be related to numerous services, such as appraising the property, initiating a wire transfer, homeowner’s insurance, analyzing the borrower’s credit report, underwriting the loan and title insurance. Here, Acuity provides the second of four parts to clearly define Tolerance Cures and the Good Faith Estimate.

Points and the Interest Rate

Many financial institutions allow buyers to pay upfront fees, which are called points, and each credit decreases the loan’s interest rate by a small percentage. Generally, the cost of every point is equal to one percent of the total loan. According to several laws, the value of points may not be altered after a financial institution has determined the interest rate of the loan.

Daily Interest

After a borrower completes the closing statement, the lender will likely charge these fees for one day to 29 days. For example, a buyer who signs the documents on the 20th day of the month will typically pay daily interest for 10 days. Subsequently, the monthly interest rate is used.

Transfer Taxes

When a title is transferred to a new owner, information about the transaction will be recorded in the state government’s archives. A person who receives a gift of real estate will also have to pay the transfer tax. The total amount of these fees may not change during the process of finalizing the loan.

Escrow Accounts

Many borrowers place a portion of each monthly installment in a third-party account, and these funds will be used to pay property taxes and to obtain homeowner’s insurance. If the buyer opts to put funds in an escrow account, any fees that are associated with the transaction may not increase.

Monthly Archives: March 2015