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The new Good Faith Estimate that arrives in 2010 is a way to allow you as the consumer to see exactly what your settlement charges are and will be. It provides much greater transparency to the consumer. The problem with the new GFE is that it advocates shopping for the lowest cost loan, which we all know doesn’t always come with the best available service. I believe this new good faith is going to lead to a lot of heartache for borrowers interested only in pricing. Having an educated, experienced loan officer that can discuss your goals and objectives for the given loan is a critical component of loan shopping. Here at Flagship Financial you will get great customer service along with very competitive pricing. Nobody has spent more time and energy becoming nimble to the changes in this marketplace than Flagship Financial. I anticipate that we will continue to adapt and show resilience in this ever changing market. If you look at our track record it is quite compelling when you see the number of Veterans and FHA homeowners we’ve helped thru the years. The one area of the GFE that makes complete sense to me is the tradeoff table. Using the table will allow a borrower to see exactly what the tradeoff is between lower interest rates and lower costs. However it doesn’t compare the overall savings associated with these changes. The new GFE is longer (3 pages) and will provide more disclosure and seems easier for the consumer to identify what settlement charges will be at closing. It will require a further inquiry as pertaining to qualifying before quoting an interest rate. There will be no more GFE shopping taking place among competitors until a thorough investigation has been done to determine eligibility. The consumer will have to realize before receiving a quote from a broker or lender he/she may be asked to provide authorization to pull credit prior to receiving this new GFE. Initial quoting of interest rates will be given in a range, understanding that there are number of factors that determine pricing.
Eric Kandell has worked in the mortgage industry since 1997. Since day one he has focused his mortgage efforts towards veterans and mastering VA loans. Eric is the owner of LowVARates.com and also manages a mortgage company full time. One of Eric’s claims to fame, is that seasoned VA underwriters will call him from time to time for information on some very intricate VA loan questions.