A big thanks to Gregg Busch for the following:
The New Good Faith Estimate. Lets Embrace it!!!!
It is a tremendous improvement over what we had. They're not even in the same ball park! It is so good, in fact, that I predict the quiet rumblings of criticism I've heard within the industry will grow louder. Why? Because this is one of those rare, government mandated documents that actually and truly helps the people it purports to help: the borrowers! The 3 page disclosure also breaks out third party fees like title company fees and state taxes.
A quick overview: the new Good Faith Estimate is three pages long. Within those three pages borrowers will find these helpful sections:
- Important Dates showing how long the rate and terms of the offered loan are valid and the terms of the rate lock.
- Summary of your loan including term, rate, amount, whether it is adjustable, negatively amortizing, subject to a prepay penalty and so on.
- Escrow Account explanation and information.
- Summary of Loan Charges in plain black and white.
- Origination Charges revealing fees charged directly by the lender.
- Other Settlement Charges making clear third party fees from the title company. They too are now going to be shopped on their fees and will compete for the buyers business. The new Hud actually breaks down the cost of title and their commission/fee on the title insurance.
- Instructions clearly explaining which charges cannot increase at closing as well as any limits on increases for those charges that can change at settlement.
- Trade-off Table wherein the lender compares how the payment (rate) and closing fees move in opposite directions for the same loan as the rate moves higher or lower than that quoted.
- Shopping Cart giving borrowers an organized way to compare lenders.
This new Good Faith Estimate is transparency, bottom line! Take a look again at those last two items: a Trade-off Table and a Shopping Cart. What is so great about this 3 page document is that the borrowers will have no surprises at settlement or the lender will make up the difference. The borrower will have done their best due diligence in shopping fees which means a faster closing transaction with a happier buyer.
I also expect an even greater share of business to come my way. For a number of lenders out there, this new Good Faith Estimate means their model for doing business is going to change. That benefits the borrowers (obviously) but it also benefits those of us who have been doing business the right way all along. In my next e-mail I am going to explain why now more than ever it is more important for realtors to work closely with their lender when writing contracts. I will also go over some of the main features of the new good faith estimate and how to read it.
WE CAN STILL CLOSE LOANS IN LESS THAN 2 WEEKS!!!!!
WE CAN STILL GET APPRAISALS BACK IN 2 WEEKS!!!!!!!
BUSINESS WILL ONLY GET BETTER!!!
Gregg Busch
Vice President
First Savings Mortgage Corporation
Direct Line - (703) 883-9580
Fax - (703) 564-4685
Cell - (202) 256-7777
E-mail - gbusch@firstsavings.com
8444 Westpark Drive, 4th Floor
McLean, VA 22102
Apply online: www.greggbusch.com
