Tuesday, December 1, 2009

New Good Faith Estimate Causes World to End!

Beginning January 1, 2010, the federal government is requiring all loan originators (both bankers and brokers) to begin using a new Good Faith Estimate (GFE). It is vastly different than the current GFE. Some of the more noticeable changes are:

• All lender fees must now be combined into one number (no more separate origination fee, processing fee, underwriting fee, discount points, etc.)
• Lender fees cannot increase once the interest rate is locked
• The new GFE is 3 pages long
• Every lender must use the same form

You will hear a lot of complaining about the new GFE, but it's not really a very big deal at all. It's just a new form and there is an enormous amount of training available for lenders.

There's no question that it is a real pain in the neck to have to learn how to use the new software to complete the new GFE, but if someone can't figure it out, they probably shouldn't be selling loans anyway. So don't listen to anyone who tells you that the housing industry is going to collapse because we have to fill out a new form. That's just silly.

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