RESPA changes that went into effect Jan. 1, now mandate consumers receive a standard, three-page Good Faith Estimate to help consumers shop around for the best loan and compare lenders’ offerings.
Under the new rules, lenders and mortgage brokers are required to give consumers the standard estimate form within three days of receiving a loan application. The Good Faith Estimate form requires lenders to combine all of the bank’s fees into one “origination charge,” enabling consumers to compare one lender’s fees with another’s. Lenders also are prohibited from increasing the origination fee from the estimate.
Some additional charges, including title services and recording charges, can increase by as much as a combined 10 percent. Estimates for other charges, such as homeowner’s insurance and other services provided by third parties selected by the borrower, aren’t subject to such limits.
Source: U.S. Department of Housing and Urban Development
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