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The new GFE and HUD-1 six months in – has civilization ended?

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Did GFE and HUD-1 changes end the world?

In January, people from title companies and mortgage companies were fanning out across the land to spread the word far and wide that the new Good Faith Estimate and new HUD-1 were the harbinger of the fall of civilization.  Confusing to the professionals, it would surely put home buyers at a major disadvantage. Not to mention, it would require lenders and title companies alike to tighten up their fee structure and (gasp!) tell the truth about their fees.

Here we are, into the June, and I can’t tell the difference.  To be fair, I am not a rockstar with a gazillion transactions to sift through but my little piece of anecdotal evidence is that the home buyer experience is no different from before. People who were prone to shop for loans to shave that last 1/8th point off their rate are still going to shop. Now, they just have a more level playing field on which to shop.  The home buyer who trusts their loan officer or trusts the their Realtor to make a decent referral are going to stick with the original loan officer. There’s plenty of other stuff going on without having to worry about shopping for loans, too.

What buyers really hear

The home buyer at the settlement table still puts on their “thoughtful and interested” face while the HUD-1 is being reviewed by settlement attorney or settlement officer. My guess, though, is that what they really hear is “Blah, blah, blah, yadda, yadda, yadda — we need your cashier’s check for $30,805.67”.  No one at any of the settlements I’ve been to since January has looked at the new Page 3.  It probably doesn’t matter because the lenders are now being more careful about the “tolerance”.

What I’m getting at here, is that, all the hoopla to the contrary, the new GFE and HUD-1 may have actually been a good thing.  It put the Fear of Government, if not the Fear of God, into lenders and title companies to be a bit more honest. Yet, to the home buyer, it hasn’t created any sort of wild and crazy behavior change.

I’m wondering about the experience of others.  Has the new GFE and HUD-1 made a difference?  Positive or negative?

“Loves sunrise walks on the beach, quaint B & Bs, former Barbie® boyfriend..." Ken is a sole practitioner and Realtor Extraordinaire in the beautiful MD Suburbs of DC. When he's not spouting off on Agent Genius he holds court from his home office in Glenn Dale, MD or the office for RE/MAX Advantage Realty in Fulton, MD...and always on the MD Suburbs of DC Blog

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12 Comments

12 Comments

  1. Erica Ramus

    June 7, 2010 at 8:18 am

    Zero difference. Except in 1 case where the lender called the buyer a few hours before settlement, and told them that they could get 0.25% cheaper rate … but only if we settled 3 days later because it messed up the HUD 1 and GFE and we’d have to wait for 3 days to settle if they took the rate cut.

    Buyers were annoyed lender even offered to do this AT THIS POINT. THeir moving truck was in the driveway of the new house, seller wanted their money, and everyone knew under the old structure, lender could just change the HUD 1 and do it. Now …. oh well.

  2. Shea Bunch Augusta Ga Homes

    June 7, 2010 at 5:49 pm

    Nice post Ken. I agree that most buyers still only see the bottom line. I have yet to have the new GFE / HUD-1 make a difference on any of my closings.

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Economic News

Boomers retirement may be the true reason behind the labor shortage

(ECONOMY) Millennials and Gen Z were quick to be blamed for the labor shortage, citing lazy work ethic- the cause could actually be Boomers retirement.

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Older man pictured in cafe with laptop nearby representing boomers retirement discrimination.

In July, we reported on the Great Resignation. With record numbers of resignations, there’s a huge labor shortage in the United States. Although there were many speculations about the reasons why, from “lazy” millennials to the number of deaths from Covid. Just recently, CNN reported that in November another 3.6 million Americans left the labor force. It’s been suggested that the younger generations don’t want to work but retiring Boomers might be the bigger culprit.

Why Boomers are leaving the labor force

CNN Business reports that 90% of the Americans who left the workplace were over 55 years old. It’s now being suggested that many of the people who have left the labor force since the beginning of the pandemic were older Americans, not Millennials or Gen Z, as we originally thought. Here are the reasons why:

  • Boomers are more concerned about catching COVID-19 than their younger counterparts, so they aren’t returning to work. Boomers are less willing to risk their health.
  • The robust real estate market has benefitted Boomers, who have more equity in their homes. Boomers have more options on the table than just returning to work.
  • Employers aren’t creating or posting jobs that lure people out of retirement or those near retirement age.

As Boomers retire, how does this impact the overall labor economy?

According to CNN Business, there are signs that the labor shortage is abating. Employers are starting to see record number of applicants to most posted jobs. FedEx, for example, just got 111,000 applications in one week, the highest it has ever recorded. The U.S. Bureau of Labor Statistics projects that the pandemic-induced increase in retirement is only temporary. People who retired due to the risk of the pandemic will return to work as new strategies emerge to reduce the risk to their health. With new varients popping up, we will have to keep an eye on how the trend ultimately plays out.

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Economic News

Is the real estate industry endorsing Carson’s nomination to HUD?

(BUSINESS NEWS) Ben Carson’s initial appointment to HUD was controversial given his lack of experience in housing, but what is the pulse now?

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NAR strongly backs Dr. Carson’s nomination

When President-Elect Donald Trump put forth Dr. Ben Carson’s name as the nominee for Secretary of Housing and Urban Development, NAR President William E. Brown said, “While we’ve made great strides in recent years, far more can be done to put the dream of homeownership in reach for more Americans.”

At the time of nomination, the National Association of Realtors (the largest trade organization in the nation) offered a positive tone regarding Dr. Carson and said the industry looks forward to working with him. But does that hold true today?

The confirmation hearings yesterday were far less controversial than one would expect, especially in light of how many initially reacted to his nomination. Given his lack of experience in housing, questions seemed to often center around protecting the LGBT community and veterans, both of which he pledged to support.

In fact, Dr. Carson said the Fair Housing Act is “one of the best pieces of legislation we’ve ever had in this country,” promising to issue a “world-class plan” for housing upon his confirmation…

>>>>>Click to continue reading…<<<<<

#CarsonHUD

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Economic News

Job openings hit 14-year high, signaling economic improvement

The volume of job openings is improving, but not across all industries. The overall economy is improving, but not evenly across all career paths.

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young executives

job openings

Job openings hit a high point

To understand the overall business climate, the U.S. Labor Department studies employment, today releasing data specific to job vacancies. According to the department’s Job Openings and Labor Turnover Survey (JOLT) for April, job openings rose to 5.38 million, the highest seen since December 2000, and a significant jump from March’s 5.11 million vacancies. Although a lagging indicator, it shows strength in the labor market.

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The Labor Department reports that the number of hires in April fell to 5 million, which indicates a weak point in the strong report, and although the volume remains near recent highs, this indicates a talent gap and highlights the number of people who have left the labor market and given up on looking for a job.

Good news, bad news, depending on your profession

That said, another recent Department report notes that employers added 221,000 jobs in April and 280,000 in May, but the additions are not evenly spread across industries. Construction jobs rose in April, but dipped in professional and business services, hospitality, trade, and transportation utilities. In other words, white collar jobs are down, blue collar jobs are up, which is good or bad news depending on your profession.

Additionally, the volume of people quitting their jobs was 2.7 million in April compared to the seven-year high of 2.8 million in March. Economists follow this number as a metric for gauging employee confidence in finding their next job.

What’s next

If you’re in the market for a job, there are an increasing number of openings, so your chance of getting hired is improving, but there is a caveat – not all industries are enjoying improvement.

If you’re hiring talent, you’ll still get endless resumes, but there appears to be a growing talent gap for non-labor jobs, so you’re not alone in struggling to find the right candidate.

Economists suspect the jobs market will continue to improve as a whole, but this data does not pertain to every industry.

#JobOpenings

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