What will happen to seller paid home warranties under RESPA 2010?

This subject was raised by an attorney conducting a RESPA training session for the Pennsylvania Land Title Institute.  I attended the session a few months ago.

He took the position that the home warranty was a buyer cost that should be placed on the buyer side of the HUD with a credit on page one from the seller.

I have done two prelim HUDs using this method.  Neither transaction has closed and

using an itemization of line #1101 for HUD prep

If you are not already using your own form, consider creating one.  It has made the process so much easier and maybe that is why I am enjoying prepping these new HUDs.

Here's how I do it.  As you know, we are doing our first PRELIM at the time we issue the title commitment, so at that time I have in hand the GFE with the provider list.

First I post all the GFE data in the system.  When I post

comments on Title Insurance Talk

Just a note to readers who wish to comment.  I love to hear from you because we all learn from each other and all the unique situations we face in real estate transactions.  It's better to NOT insert a link in your comment because I will likely reject the comment.  The only links I'll post through to comments are links that in my judgment add to the conversation.

query: RESPA 2010 who pays the mortgage broker

The mortgage broker fees are part of the origination charge.  Lender and broker origination charges are lumped together.  The lender instructions to the title agent or attorney should spell out how much of that is to be remitted to the mortgage broker.

tax service fee for FHA and VA transactions

Our take is that you place the tax service fee on the buyer side of the HUD and put a credit on the first page from the seller.  Depending on the lender, they may allow the credit to be lumped in with a seller assist or they may want the tax service fee credit on a separate line. Either way works.

query: RESPA 2010 can you stop a closing due to a 10% tolerance issue

I'd sure be surprised if a lender permitted a HUD to go to closing without a cure, however they do have the option of closing and curing the tolerance violation within 30 days after closing.  In my non-attorney opinion a consumer must make a decision to close or not.  If it were me and I felt strongly that there was a tolerance violation, I would not close unless I had in hand a signed letter

You won't believe it, but....

I had to do an old HUD today and I hated it!  It's SO not 2010.  LOL

I'm not kidding.  We're in a groove now and I'm grooving the new HUD!