FEDERAL LEGISLATION
A WEEK FROM HELL!!
In addition, HUD publishes the new 'proposed rule'. As if there are not enough challenges in the housing market, they have a new four page Good Faith Estimate. They have destroyed the words 'good faith estimate' and now maybe it should be termed MMA for Mandatory Mortgage Agreement. It is still not responsive to the industry's way of doing business.
Kudos should go to the mortgage broker group that negotiated with HUD to ease some of the proposals that were being offered by HUD. However, there are still areas that are not acceptable.
First, we are moving backwards in number of pages, from one to FOUR. Second, demanding that the borrower get THREE additional quotes on their mortgage over a ten day period is ridiculous and should be eliminated. Initially, this was proposed as thirty days. Third, the cost comparison chart is difficult and confusing and is not needed. These are some of the exceptions at first glance. However, it would appear that the section 'YOUR LOAN DETAILS' applies to ALL originators. The words Yield Spread Premium are not mentioned. The second box is written as:
'You receive a credit of $___________ for this interest rate of ______%. This credit reduces your upfront charges.'
There are three boxes to choose from. You check the one that is appropriate for the specific loan. The boxes are to be filled out by ALL originators. The bankers are not excluded (we assume). This needs to be clarified. These three boxes are attempting to describe a PAR, PREMIUM and DISCOUNT mortgage. No one is exempt from filing out the proper statement and checking the proper box. In the case of premium mortgages, it will be shown here and on the HUD-1 by ALL originators. Under the stated conditions this is a huge step toward a level playing field. You need to read this document and forward your opinion.
For your convenience, DFWAMB has placed the new proposed GFE (four pages) on our website which can be downloaded. Please review this document and e-mail your comments to info@dfwamb.org.
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