New Good Faith Estimate of Charges Launches
January 1, 2010
The U.S. Department of Housing and Urban Development issued long-anticipated mortgage reforms that will help consumers shop for the lowest cost mortgage and avoid costly and potentially harmful loan offers. HUD will require, for the first time ever, that lenders and mortgage brokers provide consumers with a standard
Good Faith Estimate (GFE) that clearly discloses key loan terms and closing costs. HUD estimates its new regulation will save consumers nearly $700 at the closing table.
HUD is the nation's housing agency committed to increasing homeownership, particularly among minorities; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development, and enforces the nation's fair housing laws.
HUD continues to believe that consumers need to be aware of the key aspects of their loan as well as associated settlement costs.
To facilitate comparison between the HUD-1 and the GFE, each designated line on the final HUD-1 will now include a reference to the relevant line from the GFE. Borrowers will now be able to easily compare their estimated and actual costs.
HUD will require the new standardized GFE and HUD-1 beginning January 1, 2010.
To view these documents, click on the following links:
The new Good Faith Estimate (GFE) must be delivered within 3-days of application.
Using a series of "Yes/No" checkboxes on Page 1, mortgage lenders specifically note:
• Interest rate on the mortgage
• Whether rate can change over time
• Whether loan carries a prepayment penalty
• The length of the rate lock
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