New govt regulations take effect, drive up closing costs

Homebuyers in 2014 will no doubt experience a higher range of closing costs than those homebuyers coming before them. With the start of this new year, both mortgage lenders and title companies are now subject to several new regulations spawned by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. 

For example, as administered through the newly formed Consumer Protection Financial Bureau (CFPB), new disclosure forms will be required of mortgage lenders and title companies by August of 2015, including, but not limited to, the Loan Estimate (replacing the current Good Faith Estimate) and the Closing Disclosure (replacing the current HUD-1 Settlement Statement).

The requirement of these new disclosure forms effectively voids all current closing software production systems and demands a complete overhaul of those software systems. Re-tooling these software systems will be just one expense that will be passed along to the consumer. 

Another closing cost increase will be shifted to consumers with the forced adoption of Best Practices policies by title companies. Because the new law imposes liability on mortgage lenders for the acts of third-party vendors, including title companies, the mortgage industry has forced the hand of the title industry to adopt a uniform Best Practices policy. 

That means every title company, small or large – local or national – must implement and administer its own Best Practices policy and remain subject to yet another time-consuming annual audit. It also means that title companies (large or small) will likely have to expand their payroll to accommodate a chief compliance officer or an equivalent thereof. 

Whether or not the consumer is better protected remains to be seen but, for now, we do know that the costs of all these changes will be reflected on the new Closing Disclosure in the form of increased closing costs.

Meet our new compliance officer protecting homebuyers and home sellers

Moving into the year 2014 and beyond, "Compliance" is the word at Federal Title as our industry undergoes a major facelift in the wake of the Dodd-Frank regulatory outgrowth.

We are very proud to announce the addition of Dianne Pickersgill, Esq. to fulfill our newly created position of Chief Compliance Officer.

Dianne received her Juris Doctorate from Harvard Law School and prior to joining Federal Title represented clients in the areas of affordable housing and HUD multifamily regulatory compliance issues.

Dianne will oversee all of our regulatory compliance issues, including implementation and monitoring of our Best Practices policies.

She will essentially act as an internal auditor to assure, among many other things, the protection of our clients’ non-public personal information, the protection of our clients’ funds, and to make sure every Federal Title employee keeps a clean desk and complies with our Best Practices policy.

If you should have any questions about our policies for the protection of non-public personal information or how we best protect our clients’ funds, please don’t hesitate to contact Dianne directly.

The importance of choosing a title company

Choosing a title company is often an afterthought. And that’s understandable, since in the home buying process, decisions will have to be made in regards to a real estate agent, a lender, a home inspector, a moving company, a termite company, a home insurance company, and on and on.

However, the selection of a title company can be a critical step in the process as well, and not just because of the pricing.

Post closing issues arise with surprising frequency. Perhaps a tax bill has been overpaid and now the buyer needs a refund from the city or county tax office. Or maybe there is a tax classification issue. Only a local title company with experience can navigate you through these types of post closing issues.

Here is another scenario that occurs all too often: a property owner contacts us for a refinance or to sell the property and the title work reveals an unreleased trust, meaning that even though the prior loan was paid off, the lien was not properly released from the Land Records.

Obviously, this was the responsibility of the prior title company that handled either the prior refinance or the purchase of the property, so the ideal and quickest solution is to go back to that prior title company.
But what if that prior title company is no longer around or was a national title vendor? Good luck finding the paper trail, especially if that loan was paid off a long time ago.

Of course you could go directly to the lender, but with all of the takeovers and changes among lenders, they often have difficulty finding old information. If you had used a respected, local title company, you would have a local contact that would personally research and resolve the issue for you.

So keep in mind the reputation and the experience (as well as the price) of the title company that you select.

Fannie Mae, Freddie Mac conforming loan limits for 2014 released

The Federal Housing Finance Agency (FHFA) published today the maximum conforming loan limits, which is the ceiling on loans eligible for backing by Fannie Mae and Freddie Mac.

The limits listed below are for some counties in Maryland and Virginia, as well as for the District of Columbia. To get a complete list of the county limits for 2014, please click here.

State County 2014 Conforming Loan Limit
DC District of Columbia $625,500
MD Anne Arundel $494,500
MD Frederick $625,500
MD Howard $494,500
MD Montgomery $625,500
MD Prince George's $625,500
VA Alexandria $625,500
VA Arlington $625,500
VA Fairfax $625,500
VA Falls Church $625,500
VA Fauquier $625,500
VA Loudoun $625,500
VA Manassas $625,500
VA Prince William $625,500
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Our blog contains general information only, not intended to be relied upon as, nor a substitute for, specific professional advice. Rate tables and figures that appear on our blog are deemed reliable but not guaranteed. For current rates & policies, refer to our Quick Quote and Consumer Guide. We accept no responsibility for loss occasioned to any purpose acting on or refraining from action as a result of any material on our blog.