There is a new form out there which is making lenders crazy and will certainly make potential mortgage borrowers crazy too! Government regulation revised a mortgage document called the Good Faith Estimate (GFE), required on all new mortgage applications after January 1, 2010.

This document requires full disclosure of all fees and closing costs in the first few days of the loan application. The fees paid at closing are not allowed to deviate from the original quotes or the lender will have to pay them. In addition to disclosing exact fees, certain things need to be done within certain dates. If this is not done properly, the GFE is null and the loan must be re-disclosed and resubmitted to the lender again. Further, if the rate is locked, the lock is no longer valid- even if the rates went up!

Four important dates to know for the new Good Faith Estimate

1. The interest rate for this GFE is available through _______.

After this time the interest rate, some of your loan Origination Charges and the monthly payment shown below can change until you lock your interest rate.

If loan is locked, the date is the lock expiration date.

If the rate is not locked, then the rate will be inserted and the date and time the rate was quoted will be inserted here. Meaning, the rate lock is good for 10 minutes.

2. This estimate for all other settlement charges is available through______________.

If loan is locked, this date should be the date the rate expires.

If loan is not locked: Broker provided: 10 business days from the date the form is completed.

3. after you lock your interest rate, you must go to closing within ____ days (your rate lock period) to receive the locked interest rate.

If loan is locked, then the lock period.

If loan is not locked, it can be anytime

4. You must lock the interest rate at least ____ days before settlement.

If loan is locked, n/a

If loan is not locked, 5 calendar days (Monday – Sunday) before closing date.

Yes, these dates and guidelines are for the protection of the borrower. The guidelines give the borrower enough notice and the lender enough time to comply. The problem is that these guidelines are confusing and will take a lot of work and extra manpower for lenders and loan officers to comply. The PROBLEM is that if they do not comply or make a mistake, it is the borrower who suffers with loss of time and money.