YOUR RIGHTS AS A CONSUMER

Through a Servicing Disclosure Statement, which will be given to you by your lender, RESPA also requires your lender to tell you if it expects someone else to be servicing your loan. Your lender will have three days from the time you apply for the loan to let you know about this.

RESPA regulations also require all parties involved in your transaction to disclose affiliated business arrangements. If anyone involved in your transaction (your lender, agent or title officer, for example), refers you to another service provider (including lenders, title officers, inspectors, etc.), the "Servicing Disclosure Statement" indicates that you generally are not required to use these providers, and are free to shop for other affiliates.

HUD-1 Settlement Statement 

The U.S. Department of Housing and Urban Development also provides protection via the HUD-1 Settlement Statement. One business day before closing, you have the right to inspect this statement, which itemizes the services provided to you and the accompanying fees charged. Be sure to call the settlement agent if you wish to inspect this form. The form generally must be delivered or mailed to you at or before the settlement.

Escrow Account Operation and Disclosures 

Your lender may require you to establish an escrow or impound account to insure that your taxes and insurance premiums are paid on time. You probably will have to pay an initial amount at the settlement to start the account and an additional amount with each month’s regular payment. Your payments may include a "cushion" or extra amount to ensure that the lender has enough money to make the payments when due. RESPA limits the amount of the cushion to a maximum of 2 months of escrow payments.

At closing or within the next 45 days, the person servicing your loan must give you an initial escrow account statement. That form will show all of the payments which will be expected to be deposited into the escrow account, and all of the disbursements that are expected to be made from the escrow account during the year ahead. Your lender or servicer will review the escrow account annually and send you a disclosure each year, which shows the prior year’s activity and any adjustments necessary in the escrow payments that you will make in the forthcoming year.

For more information on RESPA 

Visit the web page at http://www.realtor.org or call (800) 217-6970 for a local counseling referral.

There are several Federal laws, which provide you with protection during the processing of your loan. T he Equal Credit Opportunity Act (ECOA), the Fair Housing Act and the Fair Credit Reporting Act (FCRA) prohibit discrimination.

ECOA prohibits lenders from discriminating against you on the basis of race, color, religion, national origin, sex, marital status, age, if any or all of your income comes from any public assistance program or if you have exercised any right under any Federal consumer credit protection law.

The Fair Housing Act also prohibits discrimination in real estate transactions on the basis of race, color, religion, sex, handicap, familial status or national origin. Frequently, there are differences in the amounts of settlement costs charged to you – they may be based on your credit worthiness or they may be unlawfully discriminatory. It is important that you examine your settlement documents closely, especially lines 808-811 on the HUD-1 settlement statement. If you feel you have been discriminated against by a lender or anyone else in the homebuying process, you may file a private legal action or complain to a state, local or Federal administrative agency.

Remember, shopping for a home is a process that, whenever possible, should not be rushed. Make sure that you perform adequate research on the area, neighborhoods and the homes available on the market before you buy. You should do your best to look carefully and, whenever possible, try not to let your emotions make your final decision.

I will help to provide you with additional information on areas that are attractive to you, as well as schedule times for you to preview any properties that may be of interest.

New Home or Older Home?

There are pros and cons to each. While older homes can offer interesting architectural details like higher ceilings, for example, a home with higher ceilings can produce more expensive heating costs. New homes, on the other hand, are likely to be better insulated and more energy-efficient. They offer the promise -- but certainly not a guarantee -- of fewer structural and mechanical problems. On the other hand, if you need to buy new draperies and landscaping at the outset, costs quickly can add up.

Don’t forget that the area surrounding new housing developments may not be finished – and when the empty field across the street becomes home to office buildings, the neighborhood could change dramatically. Green spaces and parks may not materialize as promised. Thorough research can help.

Price

Your lender may tell you that you can afford to buy the house you adore, but are you comfortable with the monthly payments you will be obligated to make? Is the down payment within your means? Will you have enough cash to pay transaction costs and moving expenses? If the house needs major repairs, remodeling or redecorating can you save the necessary funds within a reasonable time period?

Size and Configuration

What size house do you need? What is the right combination of bedrooms, bathrooms and other living areas? How much storage is needed? Is a formal space for entertaining important or will more time be spent in the kitchen and family room?

Comfort

Do you have a priority for a single level home versus a two-story? Is central heating or air-conditioning a priority? What directions do the bedrooms and key living areas of the house face? Is there a cross-ventilation? If you entertain, is there a bathroom easily accessible for your guests?

Style

What house style suits you best? Modern or traditional? Mediterranean or cottage? Will your current furnishings determine the style of the house you choose? Are there pieces of furniture you own that require space consideration?

Features

Some buyers become enamored with pricey home amenities that seem attractive and desirable at the time, but later prove to be more headache and less pleasure than anticipated. Do you really want a swimming pool? Are you planning on having children? That may mean you will need to enclose the pool or find alternative safety elements. How much landscaping or yard maintenance expenses are you willing to incur?

Resale Potential

On average, people move to a new home every seven years. If you wanted to sell your home, how easy would it be to find a willing buyer? If you are interested in a very customized home, it is important to manage your resale expectations and gauge them against future market conditions.

Here are some questions you may want to ask: 

Are you the listing agent for this house? Busy agents sometimes arrange for a colleague or assistant to conduct the open house. 

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Don’t assume the person showing the home is knowledgeable about the house or has met the sellers.

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How long has the home been on the market? Well-priced homes in good condition generally sell in a short period of time. Unless the local market is weak, you will want to know why a particular home is not selling. Are there hidden defects? Is it overpriced? Are the sellers requiring something that may seem unreasonable as a condition of the sale?

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Have the sellers received any offers? If the sellers rejected offers that were too low or had contingencies or conditions, you should find out before you experience the same.

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Is any furniture or fixturing being sold with the house? If you’re thinking of buying the home, there is no better time to ask whether the seller would be interested in including the patio furniture or the dining room chandelier.

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Are there any special costs attached to the property? Is there a homeowner’s association that has dues or fees? Are there particular tax assessments? Are there any natural hazard issues to be aware of? Are there any hidden costs of owning the home?

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How does this house compare to others on this street? The local agent may be able to speak about recent sales in the neighborhood as well as some interior ideas seen in other homes.