Lenders navigating new RESPA rule are being encouraged to rely upon the accuracy of Washington, D.C.-based Federal Title & Escrow Co.’s online quote system to prepare their Good Faith Estimate (GFE) forms.
“Our online quote is accurate to the penny, or we'll pay the difference,” company President Todd Ewing said.
Federal Title aims to take some of the pressure off of lenders with an accurate, online GFE-based quote system.
If a lender uses the system to prepare a GFE and winds up in violation of the tolerance limitations, Federal Title will pay the difference between the quote and the final HUD-1 executed on the day of settlement, Ewing said.
The promise is called the Zero Tolerance Guarantee and it specifically covers HUD-1 series line items 1100 and 1200, also known as "title charges" and "government recording and transfer charges," which include transfer and recordation taxes, recording fees and title insurance premiums.
As the RESPA final rule aims at transparency, the title insurance industry is beginning to shift toward the same business model Federal Title adopted some time ago, Ewing said.
"Lenders are not only seeking instant, electronic quotes for title work that don't throw off any specified tolerances, they've come to expect them," he said. "With so much information available through a few taps of the keyboard, who wants to call up and ask for numbers?"
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