New Jersey Good Faith Estimate
As of January 1, 2010, mortgage originators are required to give mortgage applicants the “new” Good Faith Estimate (GFE). The document will be used by all lenders and all originators and will make it easier for borrowers to compare costs. The big plus with the new guidelines is the consistency of the form. Previously, the GFE could take on a slightly different look from one lender to the next.
The biggest minus lies in the fact that the form does nothing to allow the mortgage shopper to judge mortgage competency, service, or job knowledge. After all, it won’t help me if someone tells me they can paint my entire house for $100.00 if they never show up to do the job. Similarly, if I’m told I can get a mortgage at 3.25%, I will be up the creek if my loan cannot close. If you are looking for a mortgage, keep in mind that the Loan Officer’s ability to carry through to the end with product knowledge and borrower education is equally important.
Any borrower applying for a mortgage after January 1, 2010 must receive a Good Faith Estimate (GFE) within three business days of the application date – provided the borrower gives the “six points of information” which HUD uses to define a loan application. If the GFE is not provided, then the application must be denied. If you have provided the information below, then you should get a Good Faith Estimate.
- borrower(s) name
- monthly income
- social security number to obtain a credit report
- property address
- estimated value of the property
- loan amount
HUD added an additional item (which is rather vague): any other information deemed necessary by the loan originator.
Per HUD’s most recent RESPA update, a mortgage originator cannot refuse to issue a good faith estimate if they do not have supporting documentation (such as income or assets info) or verification disclosures signed by the borrower. If after providing a GFE to a borrower, it is discovered that the income provided is not how an underwriter would view it, this may constitute a “changed circumstance” allowing a revised good faith estimate to be issued.
HUD is well aware that consumers have been having a real challenging time getting their hands on the 2010 GFE as mandated by HUD. Be certain you get the estimate in the new 2010 format if you apply for a mortgage loan. If you do not get the 2010 (three page) GFE one, you have reason to be EXTREMELY suspicious.
Before receiving the GFE, the only fee you can be charged is the credit report fee.
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