(This is Day 2 of 12 in a series called "The 12 Days of RESPA Reform" which will run until December 31st. For a full list of RESPA topics, check here.)
Lenders used to provide the GFE at various times in the process, and on various GFE forms (each had their own). While all loan officers and mortgage brokers endeavored to thoroughly and accurately reflect all fees (and the good ones typically did) on the GFE, they were not bound by it. This changes the first of the year.
Effective 1/1/2010, the GFE:
- Will be a common form, regardless of lender. All will use this form.
- Will not be issued until the borrowers have identified a property, but will be issued within 3 days of the borrower having done so.
- Will, subject to some tolerances and changes in circumstance (to be discussed later), tie to the final HUD-1 Settlement Statement and be an accurate reflection of costs inherent in getting the loan.
- Will encourage shopping and comparison of various vendors and loan programs.
This is a shift in policy and practice. The devil - as always - is in the details, and we will monitor closely how this new change in philosophy converts to change in practice. Stay tuned!
