WASHINGTON – Jan. 4, 2010 – HUD lifted the 1 percent cap on origination fees for FHA mortgages. The move comes in light of changes to the Real Estate Settlement Procedures Act, effective Jan. 1, 2010. Lenders must now disclose a single origination charge on new good-faith estimates, which is expected to often exceed the 1 percent limit on origination fees.

Lenders expect further guidance from HUD soon on the overall amount of fees that can be charged.

The Jan. 1 changes require standardized good faith estimates (GFEs) that make it easier for borrows to consider offers from different lenders. The HUD-1 statement is also affected. For more information on the change, visit the National Association of Realtors’ website at: http://www.realtor.org/respa.

Source: American Banker (01/04/10) P. 5; Berry, Kate

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