Survey Shows Impact of New RESPA Requirements on Lenders

February 22, 2011

ClosingCorp, an independent real estate information and data services company, and Broker Banker Magazine released results of a survey of loan originators to determine what effects the recent RESPA requirements for Good Faith Estimates (GFEs) have had on their business. More than half of the survey respondents were mortgage brokers.

Fifty-two percent said they call service providers to get pricing, 40 percent said they look up pricing information on internal tables and templates, 33 percent said they research vendors and prices online, and 33 percent said they use personal referrals or a bank list of preferred vendors. (Respondents were able to select more than one category.)

Sixty-four percent of the respondents said it takes up to an hour to gather the necessary information to prepare a GFE, and 22 percent said it takes between one and three hours. Fifty-two percent reported that up to 50 percent of their closed loans have resulted in tolerance violations, with fines ranging from $50 to $250 per loan. Ninety-five percent said they inflate their GFEs to avoid tolerance violations.

“Since RESPA requirements for Good Faith Estimates went into effect, loan originators have spent millions of dollars when you factor in the increased time it takes to process each GFE, the loss of business to competitors due to overestimating, and the cost of tolerance violations,” said Paul Mass, president of ClosingCorp. “Given these factors, partnering with a technology vendor is a sound business decision because the potential cost savings are enormous. When evaluating vendors, originators should expect real-time pricing data for Blocks 3-8 of the GFE, seamless integration with popular LOS platforms, and risk assumption with a compliance guarantee.”


Contact ALTA at 202-296-3671 or communications@alta.org.

SoftPro, based in Raleigh, NC, offers a mature suite of products, designed specifically for the closing and title industry. Our mission is to serve our client base, with best-in-class products and services. Our products are modular so we don't force you to buy anything you don't need. You can always add on as your business grows. Unlike other software companies, we view the sale as the beginning of the relationship rather than the end. North American Title Insurance Company (NATIC) is a seasoned title insurance underwriter, helping title agents to achieve their individual business goals for more than 50 years. Today, the company conducts real estate settlement services in 39 states and the District of Columbia through a network of experienced, independent agents.