Coming January 2010-New Good Faith Estimate and HUD-1
December 16th, 2009 categories: For Buyers
HUD (Housing and Urban Development) has adopted a new 3 page Good Faith Estimate (GFE) as part of its RESPA reform package. The new GFE along with the new HUD-1 form goes into effect January 1, 2010.
The goal of the new Good Faith Estimate is to limit the confusion and pricing differences that borrowers were experiencing -and that is a good move. However any changes bring confusion and as lenders and other parties phase into utilizing the new forms expects some stumbles and delays -at least through the first quarter of 2010.
Normally I would be glad to answer your questions however since this is so new the government has provided a website with updated information. Best advice if you are closing on a property early next year -plan on the actual closing taking a bit longer.
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Having built my new web-site around these two new forms over the last year (closingcostsfax.com). I can tell you that the two places to pay close attention are page 2 section 1 of the GFE(our origination charge) and section 6(required services that you can shop for).Our origination charge has to be 100% accurate and may contain several different fees combined together. Section 6 must be 90% accurate if the borrowers picks the lenders closing costs but does not have to be accurate at all if the borrower shops for the closing costs on there own