New Good Faith Estimates Debut January 1st 2010

Parkland Liberty Park 7 Acre Kid Paradise
October 19, 2009
First Time Home Buyer Credit Band-Aid?
October 26, 2009

New Good Faith Estimates Debut January 1st 2010

The Department of Housing and Urban Development recently released the new Good Faith Estimate that all lenders will be required to use on January 1, 2010.  Before you start pounding your head against the wall saying, “Why, Why, Why?,” this new form is a dramatic improvement from what lenders have been showing borrowers in the past.  As a result, lenders and mortgage brokers will not be able to hide their fees and be able explain the entire good faith breakdown to their perspective clients.

The new Good Faith Estimate is three pages long and the new helpful sections include:

  • Important Dates with the length of the rate and terms being offered and the terms of the rate lock.
  • Summary of the loan including the rate, whether it is adjustable, negative amortizing, or subject to prepayment penalties Escrow Account explanation and information.
  • Summary of Loan Charges set in black and white for easy explanation and understanding.
  • Origination Charges that the lender is charging.
  • Other Settlement Charges making clear third party fees not given to the lender.
  • Instructions clearly stating which charges cannot be increased at closing.
  • Trade-off Table displaying how the lender compares how interest rate (payment) and closing fees move in opposite directions for the same loan as the interest rate moves higher or lower than that quoted by the lender.
  • Shopping Cart which gives the borrower an organized way to compare lenders possibly to shop for a better rate if possible.

This new Good Faith Estimate is transparent and can easily be understood by borrowers.  Gone are the days when a lender will be able to put a hidden fee on the closing statement.  Now, everything has to be disclosed and properly explained in detail to all potential buyers.  Our team works with mortgage professionals that are dedicated to their profession and are now using this new estimate guideline.  I am confident that this new standard will help the local Parkland real estate and mortgage business by now providing clear explanations of all of the fees before clients get to the closing table.  Our clients will be more informed as soon as they start the home buying process.  As a result, we, as Realtors, can now focus our efforts on helping our clients find the best homes on the market!

To stay updated with all of the current Parkland real estate information, receive our blog posts directly to your inbox by subscribing to the squawk.

If you are interested in buying or selling real estate in Parkland, please give us a call at 954-609-0591 or send a note to the squawk.