If you are unaware the government has determined that for all mortgage applications taken on or after January 1, 2010 a newly formatted good faith estimate of closing costs will be required. This will cause a great deal of confusion and has the potential to delay or derail closings, rate lock periods as well as force the re-disclosure of terms and conditions based on either borrowers or mortgage lenders, not completely understanding the process.
For consumers, the key is the “lump sum” approach to costs that the 2010 GFE takes. There is a section that, in theory, will allow everyone to shop the bottom line to find the best deal. This should work but because due to the fact that the playing field is not level between mortgage lenders and mortgage brokers, there will appear to be wide gaps in costs that may not truly be “net” to the customer when comparing against a lender.
For mortgage professionals, training will be the key to getting through this transition. After two training classes, there are as many questions in the authors mind as answers and only by getting those answers will the author be able to help his customers. Any attempt to get by with superficial knowledge on the part of the mortgage professional will cause the aforementioned delays.
The most amazing part of the equation is confirmation of the stereotype of government agencies and regulation. The new GFE which was designed to be simpler, easier to read and more complete in its disclosure to consumers does not, at first glance appear to accomplish any of these goals. In fact, it appears to muddy the water quite a bit. This may get better after more training. We consider this to be a dubious hope at best since in a laugh out loud moment, we discovered, that the new GFE makes things easier by replacing a one page disclosure with a three page, interlinked document. Good luck with that.
Save yourself the headaches. If the only reason you have not applied for your mortgage is that you are too busy at the holidays, skip the hassle and knock it out now. You could save your rate, your closing date and countless headaches.
