Honorable Mel Martinez We also wish to take this opportunity to communicate our concerns over HUD's apparent call for an additional disclosure relating to amounts received by lenders for the sale of loans in the secondary market. The matter of secondary market fee disclosures has been thoroughly debated and considered in previous HUD proposed rulemaking proceedings and in the context of regulatory negotiations; in every instance, the sound legal principle and interpretation that secondary market payments are exempt from RESPA has remained intact. We make clear that our collective membership opposes any shift or dilution of this longstanding exemption. We would welcome the opportunity to discuss this issue further with you or your staff. On the whole, our organizations continue to believe that comprehensive mortgage reform is the most effective way to resolve the continuing regulatory difficulties under RESPA while ensuring that consumers are afforded with the information necessary to adequately shop for mortgage credit. We also believe that significant portions of these mortgage reform measures can be achieved immediately, under HUD's existing regulatory authority. We affirm our continuing commitment to working with the Department on these regulatory improvement efforts and urge that you meet with us to discuss our groups' agreed approach in detail. Once again, our organizations commend you and the members of your staff who contributed to this effort. We look forward to continuing our partnership with HUD throughout this rulemaking process and again thank you for restoring confidence in our nation's robust housing and mortgage finance market. Sincerely, America's Community Bankers Consumer Mortgage Coalition Mortgage Bankers Association of America Mortgage Broker Fee Agreement In the following: "I" or "me" = applicant; "You" = mortgage broker Mortgage Broker Service. You are duly authorized and prepared to assist me in arranging mortgage financing for my home, and you agree to provide such assistance, as set forth below. Amount of Broker Compensation. I understand that, as compensation for the goods, services and facilities you provide, your total mortgage broker compensation from all sources will not exceed: L mortgage loan obtained). point(s)] (one point equals 1 percent of the original principal balance of the actual Method of Broker Compensation Payment. I understand that I may have a choice as to how your compensation is paid. Depending on such factors as my financial circumstances, whether I qualify for a loan and/or whether a loan program is available: I may pay your compensation for the services you provide out of my pocket directly. If I want to lower the amount I compensate you out of my pocket directly: → I may have the lender pay some or all of your compensation, in which case the lender will charge me a higher interest rate which could result in higher monthly payments; and/or →→ I may use the proceeds of the loan to pay some or all of your compensation, in which case I will be obligated to repay that amount with interest over the term of the loan. I understand that I should discuss with you in further detail the specific options available to me to pay for your compensation, including the impact of each such option on the amount of cash I must bring to the closing, my interest rate, loan amount and monthly payments. Nature of the Relationship. [Choose appropriate text][standard][I understand that in connection with this Agreement, you are not acting as my agent. You are also not acting as the lender's agent. Although you seek to assist me in meeting my financial needs, you may not make available the products of all lenders or investors in the market or the lowest prices or best terms available in the market.] [California/FHA][I understand that in connection with this Agreement and any mortgage loan you arrange for me, you are acting as my agent. You are not acting as the lender's agent. Although you seek to assist me in meeting my financial needs, you do not distribute the products of all lenders or investors in the market and cannot guarantee the lowest price or best terms available in the market.] [lender's agent] In assisting to arrange financing for my home, I understand that you are not my agent and that you are acting as the agent of the lender.] Termination. This Agreement will continue until one of the following events occurs: days expire from the date of this Agreement without any of the foregoing occurring. Mortgage Broker Fee and Disclosure Acknowledgement By signing below, I/we understand and agree to the terms of this Agreement. The contractual obligation to comply with this Agreement rests solely with the mortgage broker and the applicants signing below. No other entity shall be liable for any misrepresentation or non-performance of the mortgage broker's obligations under this Agreement, or the mortgage broker's collection of compensation in excess of the maximum compensation amount stated herein. Signing this Agreement does not obligate me to obtain a mortgage loan through you, nor does it prevent me from shopping for mortgage loans with any other mortgage broker or lender. This Agreement does not constitute a loan commitment or otherwise indicate mortgage loan approval. I acknowledge that you and any lender that makes a loan to me is relying upon this Agreement and upon my statement that I actually understand your role in the transaction and how you will be paid. UNIFORM MORTGAGE COSTS DISCLOSURE Please take this disclosure with you to settlement to compare costs. We agree to perform or provide services, goods or facilities to assist you in the origination of a mortgage loan. The services, goods or facilities may be performed or provided for your direct benefit, or some of them may benefit you only indirectly, in that they are performed on behalf of third parties (e.g., wholesale lenders or secondary market investors) but are necessary to the objective of obtaining the mortgage loan you desire. While we seek to assist you in meeting your financial needs, we cannot guarantee the lowest price or best terms available in the market. We, as with all originators, may not offer all the products that are available in the marketplace. The information provided below reflects our disclosure of the charges you will incur at the settlement of your loan. The "Origination Costs" are fees charged by your originator or an investor for providing a mortgage loan. "Settlement Costs" are fees for third party services that are required for the mortgage loan to close. These "Total Costs" are itemized for you in the grid below. The following disclosure is valid for _______ days (7 days or greater) from the date this form is delivered to and signed by the borrower. This disclosure is dependent upan the borrower qualifying for this mortgage based on their credit rating, appraisal, and other appropriate criteria. This is the interest rate for [today] for the loan you have selected. We will lock this rate for you for the following time I want to lock my interest rate. By signing above, you have agreed that this is the interest rate you will pay for this loan provided you qualify, regardless of market conditions. For this interest rate lock, you agree to pay S I choose not to lock my interest rate. I understand that my interest rate may increase or decrease before settlement without prior notification. This is the total amount of costs being charged as origination costs. These costs are itemized below. These costs will not increase unless you are not eligible for this loan program, your property changes or does not qualify, you choose a different loan program, you choose a different pricing option, or your loan amount changes. This figure does not include any settlement costs that are paid to a third party. This is the total amount of costs you will incur for the settlement of this loan. These costs are itemized below. As these costs are beyond the control of the originator, they are not guaranteed. However, if these fees change from initial disclosure, the originator is required to redisclose to you at a minimum of fifteen (15) days prior to settlement. Upon final disclosure, this amount cannot increase beyond 10% of the amount of the total amount of fees at settlement. You may waive the 15-day redisclosure requirement under certain conditions. This figure does not include the following four costs: any escrows set up for taxes, any escrows set up for homeowners insurance, any escrows set up for mortgage insurance, and any per diem interest. Please see page 2 of this disclosure for an estimation of your hazard insurance, mortgage insurance, taxes, escrow amounts, and per diem interest. This is your monthly payment based on the above loan amount and the above interest rate. This payment DOES include the following: Principal. Hazard insurance. After reading through the above information, please initial to the right of each box to show your acknowledgement and acceptance of the above data. Also, you need to indicate your preference by signing either the float or lock option in the "Interest Rate" section. These estimates are provided pursuant to the Real Estate Settlement Procedures Act of 1974, as amended (RESPA). Additional information can be found in the HUD Special Information Booklet, which is to be provided to you by your mortgage broker or fender, if your application is to purchase residential real property and the lender will take a first lien on the property. The undersigned acknowledges receipt of the booklet "Settlement Costs", ard if applicable the Consumer Handbook on ARM mortgages. The undersigned also acknowledges that I (we) have read both pages of this disclosure and that I (we) fully understand its terms. Further, by signing below, the undersigned authorize the originator to appraisal, a credit report and continue the origination process_____ draw documents in order to proceed to settlement. order an Additional Costs Certain costs are not included in the above estimates as they are based upon personal choice on your part or are dependent upon when closing will be held. These amounts are estimated below based upon a closing date of The total estimated amount of your monthly payment, based upon your loan program and amounts to be escrowed, is Interest Rate and Settlement Costs Options 1. 2. Cash Payment at Settlement: You may pay all or part of your required settlement costs at settlement using your available funds. Borrowing Additional Funds to Pay Settlement Costs: You may be able to pay all or part of your settlement costs by borrowing the needed funds as part of your mortgage loan principal. If you choose this option, your monthly payments will increase. This may not be available on a purchase-money loan. 3. Pay Settlement Costs Through a Higher Interest Rate: You may be able to lower your settlement costs in exchange for paying a higher interest rate on your mortgage loan. This higher interest rate will increase your monthly payments. 4. You May Lower Your Interest Rate: You may be able to lower the interest rate on your loan by paying additional funds at closing, commonly referred to as "discount points." The reduced interest rate will lower your monthly payments. The following table provides a generic example of how higher and lower interest rates affect your loan and loan payments. An originator may be compensated by an investor for goods, facilities or services provided to you or to the If the originator is acting as a lender in this transaction, the originator may receive additional compensation This is an Adjustable Rate Mortgage (ARM) Loan. Your interest rate may increase or decrease depending on the market. THAT MEANS THAT YOUR MONTHLY PAYMENT MAY INCREASE OR DECREASE. Please refer to the loan program |