Changes coming to HUD and Good Faith Estimates
There is a new Good Faith Estimate and HUD coming January 1st. The same Good Faith Estimate (GFE) will be used by all companies. The government stepped in and "helped" with the Good Faith...and made it 3 pages long.
Something that will help buyers is whatever is disclosed on the GFE, is what has to be on the HUD. Some costs will have a 10% tolerance, but most will not. One item that we still are a little unclear on how buyers can receive a GFE before a Home is found. The reason this may be a problem is what is disclosed, must be charged. The buyers sale price obviously may change from their pre approval, and if their costs go up (for example...title insurance) because their sale price increases, the mortgage company must eat that cost. Not being able to give a buyer a GFE at the pre approval stage concerns loan officers presently. I'm sure they want buyers to feel comfortable about the purchase and be able to confidently make offers. One idea is to put together a Homeowners Worksheet that will be given at the pre approval stage rather than a GFE. This will help buyers know what their costs are and what you need to ask for in concessions. The GFE, of course, will be given at the time of the application. You could ask for an unsigned GFE I suppose too?
Another step that is being required is for the mortgage company to send the GFE to the title company at the time of closing. The title company will be required to compare the GFE to the HUD and make sure it is in compliance and exactly the same. Mortgage companies and title companies will be working closely together on this part.
There have been a lot of changes throughout this past year. Most recently, new disclosures laws (MDIA), HVCC and Short Sale changes. I will continue to keep you updated throughout the rest of this year and next. Some upcoming changes will be the finalization of the condo underwriting changes, FHA appraisals being good for 4 months rather than 6 months (est. to be January 2010) and some more changes for sure. Lets hope for a strong year next year for all of us! For listing information please click here. Have a great holiday!
