Just in case you are getting your information from gossip and not directly from the HUD proposal, here are examples of scripts. Look at each one, please. Yes, it’s important that you look. Thank you.
Example 1 – Fixed Interest Rate Mortgage
Example 2 – Adjustable Rate Mortgage
Example 3 – Adjustable Interest Rate with Initial Discounted Interest Rate
Example 4 – Hybrid Fixed Rate Adjustable Rate Mortgage
Example 5 – Fixed Interest Rate with Balloon Payment – Interest Only
Example 6 –Fixed Interest Rate with Balloon Payment
Now, what’s so bad about that? You start your closing by reading the script, then you go about your business closing the transaction.
Here’s two great things for closers:
- The mortgage lender wants to comply and they don’t want egg on their face so they will make sure everything is A-OK before the deal goes to the table. You’ll have so many fewer transactions getting to the table that aren’t right. That’s a big bonus in my book.
- There’s nothing stopping you from going over this info quickly on the phone with the borrower before you walk out the door to go to the closing. It’s in a quick read format and you can save loads of time this way. I think reading the script with the borrower real fast on the phone is just as important as getting good directions to the closing location and might even take less time.
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10 responses so far ↓
1 The Document Diva // May 2, 2008 at 8:56 am
I’ve read that loan signing agents are afraid this script would put them out of the loan signing process since we are not allowed to explain the documents.
Who has to read this to the borrowers?
2 Diane Cipa // May 2, 2008 at 9:03 am
Hi, TDD. That’s propaganda put out by NNA. The script will formally be a part of the HUD-1. Reading the HUD-1 to the borrower does not constitute the unauthorized practice of law.
The “closing script” does not add or subtract UPL concerns in any state.
The closer reads the script as part of the review of the HUD-1. Logically, it is read at the start of closing just prior to looking at the main part of the HUD-1.
It is prepared by the settlement agent using data provided by the mortgage lender.
It must be read verbatim and therefore can’t be misconstrued as legal advice.
3 va refinance loan // May 4, 2008 at 3:50 pm
This is interesting. Great points but i really don’t understand those that are upset.
4 Diane Cipa // May 4, 2008 at 8:22 pm
Thanks, VA. I couldn’t either. That’s why I decided to put the links up.
5 lisa // May 5, 2008 at 7:14 am
So now that we have a “script”, does this mean that the borrowers will be taking responsibility for their financial decisions?
I think this is helpful certainly, but its just reiterating the note terms and the GFE in our mortgage language (in one document).
See it as a positive, but can’t say it will help if the individual still doesn’t educate themselves and understand their role when they make financial decisions.
6 Diane Cipa // May 5, 2008 at 7:20 am
Thanks, Lisa. I see it as a positive, too. For borrowers who want to listen and understand it’s a good tool. For those consumers who choose to ignore disclosure, this is so in your face that no excuses would fly post closing. It’s like Miranda rights. We told you, you didn’t listen, so tough.
I see the proposed RESPA reform as helping consumers and helping closers and helping loan originators. It gets everyone on the same page and puts bad actors out in left field.
7 Austin Real Estate Blog - Ki // May 7, 2008 at 3:56 am
I like it in that I think it will prevent confusion. Also what do you think about realtors giving these docs to clients. I get a few clients asking about loans early on in the process. I usually say something along the lines of “I am not a loan officer so you should talk to them. But my understanding is x y z”. It might be nice to hand over some papers to people.
That way when they go to the loan officer they have a basic understanding of things and can ask questions about what they are confused about.
Anyway what do you guys think? Great post. This is one of the reasons I read this blog to keep up with the what is going on in the industry. Also link number 3 is not working for me.
8 Diane Cipa // May 7, 2008 at 8:14 am
Interesting. As we’ve been playing with the script we’re finding it to be a useful tool for all sorts of reasons and may use at least the front page even if HUD doesn’t adopt it. The first page takes two minutes or less to read. It’s concise and sets the borrowers mind to rest so they can concentrate on what happens next.
I can see how real estate agents might use this verbiage for the benefit of their clients. As a tool in the hands of a consumer, it gives them all the right questions to ask.
9 Cliff Pape // May 8, 2008 at 1:08 pm
Good script, good business practice, no confusion what more could you ask for. Any good closer would like this. Great post Diane!
10 Diane Cipa // May 8, 2008 at 1:25 pm
Thanks, Cliff.
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