Pre-Approval

• One of the major provisions of RESPA affecting Florida includes a policy that will affect the process of receiving pre-approval for mortgage loans. Pre-approval under RESPA will require a potential home buyer to fill out a complete mortgage application. This must include reference to a specific home or property the consumer is interested in acquiring. Therefore, a general pre-approval that allows purchase of any property at a certain amount will no longer be considered legal.
  
  

Good Faith Estimates

• In addition to making the process of loan approval stricter, RESPA affects potential lenders in relation to the necessity of a good faith estimate on a loan. Whereas before RESPA, the lender might only supply a good faith estimate to those who asked for one, now all potential loan applicants are required to be given one within three days of their request. The estimate is also now required to include not only the amount and period of the loan, but also the date on which the interest rate would be locked in, and information on the amount of monthly payments and penalties for early payoff.
  
  

Fee Increases

• RESPA also pays close attention to who is responsible for paying any increases in fees that during the closing process. In general, the lender is considered responsible for covering increases in fees. This would include any services connected to the lender or that the lender can manipulate, thereby protecting consumers from unnecessary rises in rates. Elements that the consumer personally arranged, such as a property inspection hired privately, are considered the home buyer’s responsibility.
  
  

Other RESPA Protections

• Another aspect of the good faith estimate includes a comparison of competitive loan rates. Lenders are also prohibited from contractually obligating a consumer from using a particular insurance company on their home’s title. The lender is also required to inform the borrower if they intend to actually service the loan, or if they plan to transfer it to another lender once the loan is in place. Specific penalties for failure to include this information in the estimate are not specified by RESPA, but it does provide for penalties to be imposed on a case-by-case basis.