Say Goodbye to Closing Cost Surprises

RESPA Reform on Escondido Home Purchases

The government is stepping in once again under a RESPA reform to try to protect the Escondido home buyer.  The problem has been where the lenders upfront “good-faith estimate” is way off from what the actual charges are on the Escondido real estate purchase at close of escrow. This has been especially true in title insurance and settlement charges. Starting January 1, 2010, there will be three categories of charges; Escondido home fees that cannot increase from upfront estimates, fees that have a 10% wiggle factor, and fees that can increase without limit.

Zero Increase Category

• Escondido home loan origination fees
• Points for a specific interest rate
• San Diego County transfer taxes
• Processing and underwriting charges

Basicially, if the lender has total control, they must be totally accurate.

10% Increase Category

Charges in this category apply to the total of all charges and not to any individual charge.

• Title services and the lender’s title insurance policy when the lender requires you to use their preferred services
• San Diego County recording charges
• Other services selected by the lender such as the appraiser, credit report, or upfront MIP

Note, the above charges are charges the lender has some control over, but not total control.  The government gives them 10% wiggle room.

Charges That Can Change Without Limit

These are charges totally selected by the Escondido buyer and the lender does not have any control.

• Initial escrow deposit
• Daily interest charges
• Escondido real estate homeowner’s insurance
• Borrower chosen Escondido home title insurance
• Escondido purchaser escorw charges where buyer chose escrow

Hopefully, these new RESPA guidelines will stop surprises at the closing of your Escondido home.   Questions about these charges, please contact Gary Harmon, your Escondido Realtor, or Joyce Nathan at HomeServices Lending.