Mortgage forms and disclosures
The Department of Housing and Urban Development (HUD) has made significant changes to the Real Estate Settlement Procedures Act (RESPA) regulations to ensure estimates are more accurate and to facilitate better comparisons among lenders. Although some parts of the regulation became effective Jan. 16, 2009, use of the new good-faith estimate form and HUD-1 and 1A settlement statements isn’t mandatory until Jan. 1, 2010.

The Federal Reserve Board has made some changes to Regulation Z (Truth in Lending) that affect mortgages, and more changes are coming. It created a new category of “higher-priced mortgage loans,” established new advertising standards, and will require certain mortgage disclosures earlier in the transaction. The changes take effect Oct. 1, 2009, except for the escrow requirement—which takes effect April 1, 2010, for site-built homes and Oct. 1, 2010, for manufactured homes.

The Fed also has proposed changes in the timing of mortgage disclosures and handling of corrections. Proposals on more Reg Z changes are expected later this year for all closed-end and home equity lines of credit.

In early 2009, the Federal Emergency Management Agency finally replaced the Standard Flood Hazard Determination Form, which expired Oct. 31, 2008. The updated form becomes mandatory June 16, 2009, and expires Dec. 31, 2011. Revised interagency flood insurance frequently asked questions also are expected soon. In recent years, noncompliance with the flood insurance rules has generated the most civil money penalties by federal regulators.