Tuesday, March 29, 2011

Good Faith Estimates: More Changes to Come?

On Sunday, the New York Times reported on some of the challenges arising in connection with HUD's revised Good Faith Estimate form.  Lynnley Browning's article is here.

The federal government's rationale for mandating use of the new GFE form was to clarify borrowers' closing costs -- and to minimize last-minute changes to those costs. 

As Browning reports, the real estate industry is still adjusting to HUD's new requirements.  One example:
A growing number of lenders have been furnishing consumers with their own custom “work sheets” as a supplement to — or in a few cases, in lieu of — the required disclosures, according to Brian Sullivan, a spokesman for the federal housing department. They were being used “to weed out window shoppers and borrowers who haven’t provided enough information for the lender to be required to furnish a G.F.E.,” he said. But these work sheets may differ from the Good Faith form, further adding to the confusion.
The kicker comes at the end of Browning's article, when she reports that possible changes are in the works: "The Consumer Financial Protection Bureau has said that it is considering revising the revised G.F.E. form to make all costs clearer to the consumer."