Lenders requirement to furnish GFE

[juliedealer]

What is the name of your state? IN

In April I went to a lender to be pre-approved for a mortgage. At that time I had not found a home, but I knew that I would not require a mortgage for more than $xx,xxx. So the lender created a GFE (Good faith estimate) based on a non-existent home for that amount of money.

Fastforward to the end of May, I have found a home, I have a signed purchase agreement. The lender refuses to give me a new GFE, stating she already gave me one. Many things have changed since this first GFE, property tax, amount of sale, insurance, (both homeowners and MIP). And of course the APR.

My question: is there any requirement either in the "Truth in lending" law or Respa, that requires my lender to give me a new GFE? Or am I simply at the mercy of my lender?

The lender is Bank One

 

[HomeGuru]

What is the name of your state? IN

In April I went to a lender to be pre-approved for a mortgage. At that time I had not found a home, but I knew that I would not require a mortgage for more than $xx,xxx. So the lender created a GFE (Good faith estimate) based on a non-existent home for that amount of money.

Fastforward to the end of May, I have found a home, I have a signed purchase agreement. The lender refuses to give me a new GFE, stating she already gave me one. Many things have changed since this first GFE, property tax, amount of sale, insurance, (both homeowners and MIP). And of course the APR.

My question: is there any requirement either in the "Truth in lending" law or Respa, that requires my lender to give me a new GFE? Or am I simply at the mercy of my lender?

The lender is Bank One

**A: change lenders.

 

[wanabath]

also find a a broker in your area rather than a bank, more competitive rates

 

[HUD-1]

There is no requirement that a lender provide a new GFE when a fee or other closing cost estimate changes. If you can get a better deal from another lender, then consider switching. If not, stick with this lender and request a draft copy of the HUD-1 settlement statement 24 hours before closing so that you can review it and not have any surprises regarding interest rate/points/fees at the closing table. The items that you are referring to, insurance, taxes, amount of sale , will be the same no matter which lender you use. The GFE is only an estimate and is supposed to be a tool for a homebuyer to use when comparing terms from lenders. The HUD-1 settlement statement is going to be exact.

 

[amortgageman]

Familiar face from other parts of the internet. Did not know you came in here as well. Great site from what I have been reading the past few days. I hope I can help in here as well.

If you want to email that funky form (mine do not look anywhere near like that one) they sent you before that I helped you with and fill me in on your purchase price of your home, hopefully I can get yo a good close estimate to what your closing costs will be.

To HUD-1 and HomeGuru, (HomeGuru, edited to put your name in one word)

Though it may not be required, I think of it as a common courtesy to keep borrowers informed as to the amount of cash required to close their loan.

The two of us have previously met and exchanged information regarding her initial GFE and settlement costs. She had a question about how the figures were calculated and such. I clarified all the costs and tried to make it simple to understand for her.

She is participating in a program that mortgage brokers are not privvy to sell to their clients due to only certain lenders having access to this (IHFA program). No way can anyone else touch the terms of this loan. Hope this is O.K.

 

[juliedealers]

Wow Bruce.... this internet world is getting smaller and smaller ! Thank you for your kind offer, I may have to take you up on it. I'm probably worried about nothing but you know how we potential new home owners get...

I still think valium should be provided when you sign the buyers agreement

Julie

 

[amortgageman]

DW and I were talking the other day about why I seemed so stressed out for the past couple of weeks. I asked her if she remembered going through the mortgage process and the "always needing one more document, wondering whether our loan was going to be approved."

I told her, "Imagine having a job dealing with multiple mortgage applications at the same time, getting them all through to close effeciently, calming the nerves of the client, and helping them realize their dreams." I must love the challenge.

 

[juliedealers]

Just to let anyone who might be interested I found the following:

HUD regulation X (RESPA regulations)

Sec. 3500.7 Good faith estimate.

(a) Lender to provide. Except as provided in this paragraph (a) or paragraph (f) of this section, the lender shall provide all applicants for a federally related mortgage loan with a good faith estimate of the amount of or range of charges for the specific settlement services the borrower is likely to incur in connection with the settlement. The lender shall provide the good faith estimate required under this section (a suggested format is set forth in appendix C of this part) either by delivering the good faith estimate or by placing it in the mail to the loan applicant, not later than three business days after the application is received or prepared.

Sec. 3500.2 Definitions.

(a) Statutory terms. All terms defined in RESPA (12 U.S.C. 2602) are used in accordance with their statutory meaning unless otherwise defined in paragraph (b) of this section or elsewhere in this part.

(b) Other terms. As used in this part:

Application means the submission of a borrower's financial information in anticipation of a credit decision, whether written or computer-generated, relating to a federally related mortgage loan. If the submission does not state or identify a specific property, the submission is an application for a pre-qualification and not an application for a federally related mortgage loan under this part. The subsequent addition of an identified property to the submission converts the submission to an application for a federally related mortgage loan.

I'm entitled to a GFE within 3 business days when I apply for a property with an address, preapproval does not constitute application.

source;
http://www.americanbanker.com/media/regulatory/fedregsataglance/HUDRegX051302.html#35002

 

[amortgageman]

I thought you had already gotten the information from the lender. Are you ever going to get this loan closed?

In your case, you had not had a specific property picked out when you applied for the loan and the initial GFE was sent, therefore, yes, the lender should have sent you a GFE after the property was selected.

I guess from my previous post, it did not clearly spell that out for you. I always keep my clients up to date if anything changes regarding cash to close, title insurance, etc. Common courtesy prevails.

 

[juliedealers]

Bruce,

My contract states the closing date on or before July 4....(as if anybody is gonna close on Sunday July 4 !) So no I'm not closed yet.

I just got off the phone with the bank, specifically this loan officers supervisors secretary (big wow...) During the conversation I started quoting regulation and section as to why they need to give me a GFE... I got that real high tight pithed off tone of voice after that. I may have just cut myself off at the knees by letting the bank know I know my rights. We'll see.

 

[HomeGuru]

Back to the original question re: GFE. To update a GFE only takes minutes, so if a lender will not provide an update, I would not continue working with that lender. I have asked lenders to update a GFE up to 6 times.

 

[juliedealers]

Homeguru,

Unfortunatley due to the type of loan this is I am not in a position to (particulary at this point in time) to go to another lender.

Today the loan officer I have been having problems with called and said, " Oh I sent you that paper work, didn't you get it?" "I didn't know you didn't get it". I had asked repeatedly for a GFE for the home I was buying for the past two weeks.

On the day I brought in the sales agreement I asked for one based on the property I want to buy, she had told me "You can't have another one" She now just denies all this and claims she sent me one long ago.

Anyway she says she'll send me a copy of the "one I already sent you", I told her well it seems the mail must be a problem here so FAX it to me. So I expect to see a back dated document, and I can't prove otherwise, but that is okay all I want is an estimate of where I stand.

 

[HomeGuru]

Ok, good luck and I hope closing is real soon.

 

[juliedealers]

I closed yesterday afternoon!!! I got a check for 1977.53 at closing. Go figure. Thanks for every ones help.

 

[amortgageman]

Julie,

Congratulations! From the info you sent me, I knew you were going to get some money back, but that is a lot more than I had figured.

Let me try to predict your next question: Should I invest in a new lawn mower, bedroom suite, new living room furniture or what?

It's really comforting to see that you have enough money left over to afford a moving truck, and will not be eating peanut butter and jelly sandwiches until payday.

Edited to add: Now I think I know, they didn't need nine months escrow on property taxes after all, did they?