NOTICE: ALthough the new HUD1 and GFE have been released we don't start using them until January 1, 2010 so no need to stop, drop and roll.
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Here, you will need these:
The new GFE http://www.hud.gov/content/releases/goodfaithestimate.pdf
The new HUD1 http://www.hud.gov/content/releases/hud-1.pdf
Got those? Great!
The first thing you will notice about the GFE is that it is totally redesigned. It's not just Windows Vista with a new name it is actually a different set of documents! Easier to understand? Let's see:
First section Got that first sentence - the average borrower will skip right over the further information blah blah blah.
don't you know they refer you to page three ... ya, okay - so there's no shopping cart. Oh CHART. Ya, you want ME, Mr. Borrower to fill this out? I'll just trust the bank - after all they are HUGE - they wouldn't lie to me. And they have been so kind to provide their competitor's costs for me right here online. Where do I sign?
#1 uhm this interest rate is good through ... heck, is it even locked yet? It's good through about the time we hang up the phone. You want every loan locked at application time? Talk about firing some loan officers! (I wonder if people realize that locking a loan means the lender will be paying the daily interest on that amount of money whether or not the loan closes?)
#2 All other settlement charges? Uhm okay that's a given.
#3 "After you lock your interest rate" .... infinite loop with #1
#4 that would be uhm 0?
- I have my tongue in my cheek by the way -
So here is what I do like about the new GFE on the front page
(A) there's no TIL - it is on the GFE
(B) I do believe it will make it easier to explain to short attentioned borrowers
(C) There is no space on there for YSP (come on! This is either really good for customers because it won't confuse the crap out of them or really bad for customers because it means on 1/1/10 there will be no YSP - yikes.)
(D) It has a tally column that will let people separate numbers from gobble-de-guk
(E) The tally columns have bottom lines just like real people do!
And the HUD1
Probably the best change is that it has the line numbers from the GFE to match up GFE numbers with HUD numbers. Of course if you are lucky and get wonderful borrowers like mine they will want forty-eleven GFE's to match the umpteen houses they are looking at so they are bound to show up at the closing with a GFE for a $199,000 loan to close on a $349,000 loan and then go berserk because their payment and closing costs doubled. (I kid you not, this WILL happen.)
All in all I think the changes are good. I still don't think they are going to save the ignorant from the unscrupulous but that's not my job. I'm not unscrupulous and I actually take the time to explain everything in painstaking detail to my clients ... and probably yours too.
Now wasn't this fun?
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