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Seth Campbell's Blog

By Seth Campbell Realty Group | Agent in Shrewsbury, MA

HUD Lifts Cap on FHA Origination Fees

The Department of Housing and Urban Development (HUD) has removed the 1 percent ceiling on loan origination fees for standard mortgages insured by the Federal Housing Administration (FHA).

The Mortgagee Letter outlining the change was issued last week just days before the new Real Estate Settlement Procedure Act (RESPA) disclosure rules took effect on January 1, requiring lenders to clearing disclose borrowing costs.

According to HUD, the sum of all fees and charges from origination-related services required as part of the good faith estimate “will most often exceed the specific origination fee caps set for government programs.”

Without the cap, some consumer advocacy groups argue the fees charged to borrowers for government-backed loans could rise too much, but HUD says it expects competition among lenders to temper excessive increases.

The new RESPA rule standardizes the good faith estimate provided to applicants detailing mortgage terms and closing costs, making it possible for the first time for consumers to compare fees charged by different lenders and shop around for the best possible deal.

HUD says FHA will also be monitoring lenders to ensure the fees charged for origination services are “fair and reasonable.”

The agency also stressed that the FHA commissioner still has the authority to set future limits on the amount lenders can charge borrowers for obtaining a government-insured loan and indicated that additional guidance on origination fees would be forthcoming


By Anthony,  Tue Jul 27 2010, 08:32
Its a very informative article & liked reading it.

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By Rose,  Sat May 7 2011, 06:15
I found the information provided by this blog is very much useful for me. I plan to buy a home very soon
By Annie,  Wed May 11 2011, 06:57
I am looking for a farm house somewhere in a cool place. Thanks for providing me a good insight how to evaluate various options.

By Betty James,  Thu May 26 2011, 02:58
It is really good Article and also informative...........

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