Good Faith Estimate - with or without credit report?

The third lender refuses to provide anything in writing without running my client's credit!

The third lender is actually correct.  It is impossible to furnish an accurate GFE without determining a credit analysis.  The first two (and the ones you've obtained in the past) are actually perpetuating inaccurate information and the "game" in the mortgage business.

Kaushik:  you shouldn't be shopping loans but shopping loan originators.  Try asking the mortgage companies to negotiate a flat fee for providing mortgage services if you want to shop price.  If they're direct lenders, they'll balk or claim "non-disclosure of YSP" as their cloak.  Have your client get a GFE from your preferred mortgage broker with a reasonable mortgage brokerage fee (about $3-4000) and then ask the direct lenders to match it.

You'll be VERY surprised. 

Kaushik, at the risk of sounding like I am disagreeing Brain, because I don't think I am, but I will take a different approach to this.

Based on you statement that you stated "Have them assume his credit is excellent." then I would do a GFI, but I would tell your client that if his credit isn't excellent, then the fees on the GFI could change, because I might have use a different loan program. In other words my fees would be accurate as long as he is telling me the truth.  Hopefully this is what the first two Lenders told him.

On the other hand, what is the problem with all three running his credit???  It will be bundled into just one hit as long as all three are running it within 10 days.  So why guess at the fees when he could have a GFI that is not based on his assumption that he has "excellent" credit.

On the other hand, what is the problem with all three running his credit???  It will be bundled into just one hit as long as all three are running it within 10 days.  So why guess at the fees when he could have a GFI that is not based on his assumption that he has "excellent" credit.

That's what I was looking for, George. 

I never give quotes based on "assumptions" because those assumptions never pan out.  Also, it's too east to finagle those quotes (after all, I never knew...the borrower missed a payment on his JC Penney card in 2002; that's why the quote is no good) 

Kaushik, just a little more information that might help you out.  The Credit Report is good for 90 days, and I don't know about everyone else, but with me, I do not have to run the credit again if there is more than 45 days left on the credit report at the time that I submit the application, and if the closing is going to happen within the remaining period that the Credit Report is good for. 

I can't do loans where you are, but I would think that other lenders would be similar to me. 

Brain, thank you for that information.  We do not accept anyone else’s Credit Report at this time, and I am not aware of anyone else here in Connecticut that does.  It does not make any sense to me to not run one, because if there is anything that needs to be address on the report, the other Credit Company is not going to work with me to help the Borrower clean it up.  I do not charge for Credit Reports until we actually have a loan, and then it is a charge at the Closing.  So there isn't any advantage to not let me run a report, unless we are right at lets say 620 and it is more than 10 since the last Credit Report was run, and running it again would be a new hit now.  Also if the report by the other Lender was run by a Credit Company that I do not do business with, I will not have the ID number and Password to link it to DU and get an Approved/Eligible based on Underwriting criteria and Credit.

Kaushik,

9 out of 10 times, I will send out a GFE to my borrowers without even running credit. I always tell them that everything is subject to change and rates can flucuate if by chance thier credit score is not what the told me. That is why it is important to get all of the facts up front and understand exactly what situation is best going to work for them. There have been numerous of times where customers think that my GFE is way too high and know they can get a much better deal with a broker who for the most part is full of it. Then all of a sudden, they rush back to me because either they did not qualify for the program or it was going to cost them an arm and a leg. Bottom line, you need to get a feel for your borrower and that indicates exactly what to do for them.

 Aaron Brown

Direct Lender

North Scottdale Branch