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New GFE: Not all costs on the GFE are locked in!

By
Real Estate Broker/Owner with Highland Realty, Inc 0225 099336

Finding your way through the new GFE almost requires a detective to help identify the twists and turns, what can change and, which fees are set in stone, unless, of course, it falls under one the exceptions..... As most of you already know, the new rules require mortgage originators to lump the origination costs - including the interest rate and underwriting fees - under one bundled fee on the GFE; once lenders receive GFE's from mortgage brokers, they have to accept the charges.

However, not all costs on the GFE are locked in; charges affected by "changed circumstance" can be modified as needed, but the loan originator must issue a new GFE, and only the fee subject to the "changed circumstance" can be altered.

Another class of charges is subject to a 10% tolerance, which gives those fees a little room to vary from the original estimates. Among these charges are title insurance fees, as long as the borrower uses the title company listed by the mortgage originator. If the buyer chooses a different company, there's no restriction on how much the charge can change at closing.

So far, it's still a little confusing getting to closing; many people on all sides of the transaction are having difficulty with the new GFE format, rules and exceptions. What have been some of your experiences? Suggestions?

 

Dave Rosenmarkle

Broker/Owner

Highland Realty

Arlington, VA  22207

703-538-2566

davidrose@mris.com

www.HighlandAgents.com

 

 

Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

The new GFE was invented by the same government autorities, HUD, that invented the new FHA regs.  These government entities clearly believe that "government speak" is fine for consumers and the more complicated the more brilliant the regulators will appear.

This rag, the new GFE, doesn't even comply with the reduction in paperwork act.  In fact, it exceeds it by 66.66%.

How many pages would it be if it included the consumer's monthly morgage payment??

Jan 30, 2010 10:02 PM
Dave Rosenmarkle
Highland Realty, Inc - Fairfax, VA
33 years of providing fully satisfying service!

Good morning Lenn. Thanks for the comment. Hope you're all dug out from the light "dusting" we were supposed to receive yesterday......

Jan 30, 2010 10:09 PM
Tony Grego, 317-663-4173 #1 Trade Association for Alternative Inv
REISA - 317-663-4173 - Indianapolis, IN

This form has taken us back big time. Clients are scared to death and when you get a deal through underwriting the closing department tears it up and re-stips for just about everything.

It was a very long month

Jan 30, 2010 10:29 PM
Harry F. D'Elia III
WEDO Real Estate and Beyond, LLC - Phoenix, AZ
Investor , Mentor, GRI, Radio, CIPS, REOs, ABR

Thanks for updating us on the new GFE format. I am not a big fan of it.

Jan 30, 2010 10:45 PM