MauiLifeStyleBlog

 Compliments of
Alan Zukerkorn
Hawaii Mortgage Company Inc.

PHONE:  (808) 988-6622     alan@hawaiimortgage.net

Your Rights as a Consumer

There has been a lot of confusion about the new 2010 Good Faith Estimate (GFE) and what a consumer is “promised” over the phone.  One of the main reasons HUD (Federal Dept. of Housing & Urban Development) made such a drastic change to how the lending industry works is due to lenders “low-balling” rates, providing inaccurate closing costs, and hard-selling uneducated consumers into loans they would normally not consider.  All this done solely to put more money in the pockets of greedy mortgage lenders.

On January 1^st, the new 2010 GFE was mandated by the Federal Government.  It gives the consumer an honest picture of the type of loan being offered, the fees associated with the loan, and their total closing costs.  Although I personally have many complaints as to how the new form provides the information, and the difficulty most consumers have in reading it, it has resulted in one important change:  If a consumer is provided one by a lender, they have received an honest rate quote.

Consumers must change the way they shop for a loan.  Calling around and getting verbal rate quotes is no longer (and has never been) a good way of picking a lender.  There is no way the government can regulate what a dishonest lender says to a consumer.  That is why the written and binding 2010 GFE is so important when considering a lender.  After you receive the 2010 GFE you as the consumer have specific rights.  The lender is bound to the fees, and most importantly, what they will be compensated for your loan.  Even if you complete your “shopping” several days later and rates have changed, the origination fees disclosed by the lender on your original quote are fixed, and not subject to change.  The GFE is also provided to the closing agent, and any fees that do not match, are not allowed to be added at closing.  There are a few exceptions, but in general, what you are promised at the beginning, must be the same at the end.

Remember these simple rules:  Always ask for a 2010 GFE.  When shopping, give each lender the same loan scenario.  Make sure the rate they quote you is for the same loan commitment (lock) period.  As a service to consumers, if you are uncertain of how to read the new form, please give me a call for a honest hassle-free review.