This will be the third version of this post since I started writing The Mortgage Porter in late 2009. Things have overall changed for the better for consumers when it comes to the closing procedure. Last month, two new disclosures, the Loan Estimate and Closing Disclosure, were introduced replacing the Good Faith Estimate and HUD-1 Settlement Statement effective for loan applications dated October 3, 2015 and after. This post applies to loans originated after October 3, 2015. If your loan application is dated prior to October 3, 2015, you should refer to this post instead.
The Good Faith Estimate will retire today
October 2, 2015 by Leave a Comment
It is hard to believe that it was just five years ago when HUD created and required the use of their uniform Good Faith Estimate, often referred to as the 2010 GFE. HUD was very proud of this achievement despite obvious flaws with the document, including (and not limited to) no total monthly mortgage payment (PITI), no total funds due for closing and lenders having to disclose costs that the borrower did not have to pay (such as the owners title policy). The 2010 GFE, which was created to help borrowers shop lenders, was also severely flawed because a lender could not issue the GFE with having a “TBD” address for home shoppers. There was no wiggle room for lenders to re-issue the GFE to add an address.
The new Loan Estimate and Title Insurance Fees
September 18, 2015 by 3 Comments
In just a few weeks, the Good Faith Estimate that was created by HUD in 2010 will be replaced by CFPB’s Loan Estimate. The Loan Estimate will also replace the “Reg Z/Truth in Lending” document. When the samples of the “Loan Estimate” where first revealed, I was pretty excited. It appeared to be a significant improvement over the well intended but flawed 2010 Good Faith Estimate, which caused a lot of confusion for consumers. As I’m learning more and more about CFPB’s Loan Estimate, I can see that we are all in for a huge adjustment as we deal with not only implementing new documents and procedures, but also dealing with the flaws to the document and the procedures to the document.
New Mortgage Disclosures Possibly Delayed
June 26, 2015 by Leave a Comment
The CFPB is requesting that the deadline for the new “good faith estimate” disclosures (aka “TRID”) be delayed for two months to allow lenders more time to transition into the the new forms…and because the CFPB made an “administrative error” that would have caused a delay with enforcing the rule. From the CFPB’s website:
Wanna close on your real estate transaction in 30 days? You better buy or sell before August 2015.
April 22, 2015 by 1 Comment
New disclosures created by the CFPB (Consumer Financial Protection Bureau) are set to go into effect on August 1, 2015. In my opinion, the new disclosures will be a huge improvement compared to the Good Faith Estimate that HUD created in 2010. At least the new disclosures will show the total payments due…and of course, they’re not perfect either. I’ll address the new forms on another post.
CFPB takes action against a DIFFERENT Mortgage Master and Washington Federal
October 10, 2013 by Leave a Comment
Yesterday, CFPB announced they ordered Mortgage Master, Inc. and Washington Federal to pay fines for violating the Home Mortgage Disclosure Act (HMDA). “HMDA” (pronounced as “hum-da”) is the section of the loan application which asks applicants to disclose their sex and race, which is reported to the government to prevent discrimination.
Why would a consumer work with a non-licensed Mortgage Originator?
January 17, 2013 by 1 Comment
Following the release of the QM and Ability to Repay rules from CFPB, I decided to try to read through the proposed Loan Originator Compensation rules. I found this pretty interesting. Instead of making additional regulations for Mortgage Originators who work at banks or credit unions, why not just make them subject to the SAFE Act and require them be licensed?
CFPB’s Qualified Mortgage Rule and the Ability to Repay
January 10, 2013 by 10 Comments
Today the CFPB released the “ability-to-repay” and “qualified mortgage” rule which is set to go into effect next year on January 10, 2014. These new laws will require that lenders consider a borrowers ability to repay a mortgage.
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