Here’s your chance to catch up with news included to inform, enlighten and perhaps even entertain you. To read aboutThe Big Apple, check out the other of today’s posts and look for Out and About early next week.
The new Good Faith Estimate (GFE) went into effect at the beginning of the year.
Its aim is to protect the consumer against hidden fees and enable borrowers without advanced degrees in accounting or law to compare apples and oranges. Previously, GFEs had a way of departing from reality at the closing table.
As mortgage broker Bruce Maasbach and others have written, from which I am shamelessly quoting without little additional attribution, the new GFE rules require lenders to disclose and estimate all the closing costs outside of their own fees accurately.
The clincher is this: The lender must guarantee that the costs will not vary by more than 10 percent of the actual cost at the time of the closing. If so, the lender ends up paying them. Continue reading →
A form that everyone in the real estate world knows as a HUD-1 details every cost to the seller and buyer at settlement.
The law requires that the lender furnish the form at least a day prior to closing, but there is no penalty for their failure to comply.
In most jurisdictions, lenders struggle to provide the form in time and almost invariably do so. In Manhattan, however, the law is overwhelmingly more honored in the breach than in the observance of its requirements.