RESPA- Changes The Good Faith

Mortgage and Lending with Guild Mortgage Company

Did you know that the Good Faith Estimate (GFE) is changing?

 Why is the good faith changing? RESPA (Real Estate Settlement Procedures Act) is an industry wide initiative required by U.S. Dept of Housing and Urban Development (HUD) in which all lenders and mortgage brokers will need to comply with no later than January 1, 2010.


 Here are some key changes:

  •  The GFE (Good Faith Estimate) format will now be standardized across the industry. The GFE can no longer be customized to meet a lender/program/product-specific need, which will ultimately lead to less confusion for borrowers.


  •  Charges disclosed are transactional (regardless of who is paying - the total cost is disclosed) and not specific to charges being paid by the borrower.


  • The GFE will no longer calculate the cash to close, down payments, or POC (Paid Outside of Closing) charges.


  • The origination charge will represent ALL lender charges as one lump sum.


The new three-page GFE will consist of the following:

  • Page one summarizes key loan terms, breaks down escrow information and displays total estimated settlement charges for the loan transaction so the consumer can easily compare loan terms between lenders when shopping for rates.


  •  Page two estimates total settlement charges.


  • Page three is an instructional page designed for borrowers to use as a shopping guide to compare GFE's from other lenders.

  GFE Supplement:

 A fourth page may be added to your good faith estimate, if there are additional services or costs that will not fit on page two of your good faith estimate.

What is the importance of these changes?

This will provide further protection to the consumer from undisclosed charges and fee increases in settlement charges. It is also intended to help consumer's comparison shop among the different loan originators/lenders.


Heather Burns

Home Mortgage Consultant

Wells Fargo Home Mortgage

10900 NE 8th St Suite 1430

Bellevue, WA  98004

(425) 468-8645 Tel

(206) 714-3522 Cell

(866) 496-5671 Fax


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Michael Regan
The Regan Team Home Loan Group - Petaluma, CA
Home Loan Extraordinaire

Good post!  It'll be interesting to see how this change goes. 

Oct 16, 2009 11:11 AM
Sharon Parisi
United Real Estate Dallas - Dallas, TX
Dallas Homes

These changes appear to be extremely beneficial to Buyers.  It has been difficult for Buyers to compare costs, from several lenders, in the past.

Oct 16, 2009 11:14 AM
Heather Burns
Guild Mortgage Company - Kirkland, WA

Michael, Thanks.. I do think it will be beneficial to the client!

Sharon, I am really looking forward to it!


Oct 20, 2009 09:07 AM
David Jirasek
Jirasek Realty, LLC - Temple, TX

Heather, I sit through a three hour class on this today. I'm not sure if I understood it correctly. But it will be interesting to see how some things are handled!

Nov 18, 2009 11:33 AM
Heather Burns
Guild Mortgage Company - Kirkland, WA

David, I think that it will take getting used to in the begging but it will all start to make sense! it is hard to keep up with all the changes in the industry right now. I think having just one GFE and HUD to compare and contrast from lender to lender will simplify a lot of buyers questions in regards to loan costs, loan fee's, and pre-paid items. Feel free to always Email or call me with any questions and I will do by best to help you out! Have a great Day

Nov 22, 2009 08:29 AM