Who appointed HUD the Jell-O sheriff of the house?
There is no method of making a no-fee loan work. The lender and closing agent cannot reduce the phantom fees and credits disclosed on the HUD-1, since this would evade RESPA. Lowering the purchase price of the home reduces the IPC limit, and increases the excess IPC. It would seem therefore, that HUD has outlawed no-fee loans. Some will argue that disclosing every settlement service fee as a borrower cost is a good idea — that borrowers should recognize that every concession is really a fee paid by the borrower in terms of a higher interest rate or purchase price. However, HUD has no authority to require the parties to recharacterize the terms of a valid and binding purchase agreement or loan commitment. Section 17 of RESPA states: “Nothing in this chapter shall affect the validity or enforceability of any sale or contract for the sale of real property or any loan, loan agreement, mortgage, or lien made or arising in connection with a federally related mortgage loan.” Hence, if the pur
