Since mortgages can be confusing and frustrating the Federal Housing department is proposing to change the process from opening to closing. It will be designed to Make it easier to compare mortgage offers, lenders will need to estimate closing costs and that barrowers know the terms of their loan.
Here are some of the biggest changes:
Good Faith Estimate Changes
- A 4 page estimate for all closing costs, final closing costs could not exceed 10% of estimate so it would have to be somewhat more accurate.
- Show trade off between interest rates and lender's fee to be more clear
- Broker's compensation from the lender to be disclosed
- It would be easier to compare the good faith estimate with the final HUD-1 statement of fees.
- Someone would have to read aloud an accurate summary of the loan deal and the settlement charges
- Also, a ban on builders telling clients that if they don't go through their approved mortgage company then the clients will need to bring in higher deposits and will not receive the a monetary "closing incentive".
This is the second the Bush administration has tried to make regulation changes but was opposed by the lenders, brokers and title insurers. This time the lenders, brokers and title insurers are warmer to the idea because they had more input.
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