ALTA Releases Update to RESPA-Compliant Uniform Instructions to Aid Use of New Mortgage Documents
|July 15, 2010|
The American Land Title Association (ALTA) announced it has updated its uniform set of instructions to help facilitate the handling of new settlement documents that became mandatory Jan. 1, 2010 due to changes to the Real Estate Settlement Procedures Act (RESPA).
The Uniform Supplemental HUD-1/1A Instructions were developed by the ALTA RESPA Implementation Task Force and originally published in December, 2009. The Instructions were developed with a goal of guiding the lending and settlement services industries to a common approach to completing the new HUD-1. The updated instructions are now available in an editable PDF file format and further facilitate the transfer of information from lenders to settlement agents in order to create an accurate, compliant HUD-1/1A.
On Jan. 1, 2010, HUD began requiring lenders and mortgage brokers provide consumers with a standard Good Faith Estimate (GFE) that discloses key loan terms and closing costs. Closing agents are required to provide borrowers a new HUD-1 Settlement Statement that compares consumers' final and estimated costs. The Uniform Supplemental HUD-1/1A Instructions designed by ALTA facilitate lender and settlement agent compliance with the new RESPA regulations.
“By including this information in a standardized format that can be keyed in directly from a computer, ALTA's Uniform Supplemental HUD-1/1A Instructions greatly reduce the burden on lenders and settlement agents related to preparation and approval of final HUD-1/1A documents,” said Mark Winter, president of ALTA. “Lenders and settlement agents who seek a more efficient and compliant closing and funding process will adopt this form.”
Adopting a standardized format for transmitting the information from the loan originator to the settlement agent that is necessary for the completion of the HUD-1 will benefit all of the participants in the settlement process by improving the efficiencies and accuracy of the finished product.
“Uniformity benefits the loan originator, settlement agent and consumer by reducing the incidence of errors, thereby eliminating problems at and after the settlement as well as speeding up the settlement process,” Winter said. “This supplemental document in its updated form adds efficiency and transparency to the new mortgage documents and should prove advantageous to lenders looking for a standard way to send Good Faith Estimate information to settlement agents.”