The new Guaranteed Mortgage Package Agreement (Proposed by HUD) is going to become a reality, whether you're ready or not!
HUD has been working on it since 1998. That's 5 years in the making! There is no doubt in my mind that it will become law..HUD wants it; large lenders like ABN AMRO are behind it; mortgage bankers are behind it; and the customer would prefer it. Yes, the customer would rather have one quote for total costs and rates, and have it guaranteed, rather than trying to de-code and compare good faith estimates.
It's pretty much a done deal. So what will the new GMPA mean for loan originators and what would be an appropriate strategy? Let's take a look!
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Note from the Publisher...
To read the entire proposal and print the Proposed Guarantee Mortgage Package Agreement forms, visit www.alta.org/govt/issues/02/67fr49134.pdf. It's a PDF file with the proposed rules, but the actual form is found on pages 36 and 37 of this 42 page file.
To view a Comparison Chart of the Good Faith Estimate with the current GMPA treatment, visit www.alta.org/govt/news/2002/docs/table.pdf.
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HUD proposes a much simpler form of disclosure called the Guaranteed Mortgage Package Agreement (GMPA). This Agreement will lump all closing costs into one total package and guarantee the package price and interest rate for 30 days. In exchange, HUD will carve out a safe harbor under RESPA, freeing you up from worrying about kickbacks or steering busines to "partners".
I have heard basically 2 outcries about this proposal from other loan officers. The first outcry is over guaranteeing the rate for 30 days. (Click on link mentioned in the sidebar above to view forms.) This form is actually well thought out (mind blowing that the government came up with only a 2-page disclosure)! If you look at their proposed form, it is broken into seven sections.
