Report Shows Loan Costs RIse

With all the hoopla surrounding the new disclosures, RESPA, and new GFE (good faith estimate) changes, it is interesting that a new report indicates that nationwide loan closing costs have risen 37% over this time last year.

HUD had touted that these new regulations would help the borrower reduce closing costs. But with HVCC, new title and escrow charges, changes with YSP (yield spread premium), etc., the fact remains that everytime you find more paperwork involved and more stringent guidelines imposed, everyones costs to get the job done rise and the end result is the consumer pays more.

HUD has been looking at reducing the seller paid closing cost percentage on a FHA loan from 6% to 3%. The National Mortgage Bankers Association has asked HUD to think more along the lines of only going down to 4% in light of these raised closing costs.