An official website of the United States Government
  • Home
  • Blog
  • Know Before You Owe: We’re Back!

Know Before You Owe: We’re Back!

By

Last month, we introduced the Know Before You Owe project to give consumers, lenders, and other industry participants a way to help us make mortgage shopping easier. You responded with more than 13,000 comments, and we listened.

We appreciate the time you took to give us those comments. Your feedback was largely consistent with the one-on-one interviews we conducted with consumers, lenders, and brokers, and we’ve incorporated much of it into our new prototypes. Thank you for helping us on our effort to provide consumers with the information they need to understand and compare mortgage offers and to find the one that works best for them. We want lenders to present this information as simply, clearly, and effectively as possible.

So now we’re asking for your input once again. We want you to tell us what you think of the new versions. Know Before You Owe graphic that links to Feedback Tool

In the first round, the back page was the same on both versions. The front page – the “shopping sheet” – was different. This time, the first page is the same on both versions, and our focus is on the back page, which deals with closing costs: how well do these new drafts communicate that information?

A few words about the new sample forms, which come to us from the (fictitious, of course) Redbud Credit Union and Dogwood Credit Union

  • The revised first page features the dark tabs and yes/no buttons from the Ficus Bank draft from Round 1. Both Round 1 forms generally performed well, but some groups of consumers found the Ficus Bank format easier to use, so we kept many of the Ficus design elements. The new prototype also integrates several of the best Pecan features, and it reorganizes and clarifies the information to reflect the lessons we learned from Round 1. Again, this time, the first page is the same for both prototypes.
  • The second pages of the Round 2 forms provide alternative approaches to showing closing costs, so that we can focus in on how much detail is helpful to consumers.

Just like last time, here are a few questions we’d like you to keep in mind as you review:

  • Would this form help consumers understand the closing costs associated with their loans?
  • Could lenders and brokers clearly and easily explain the form to their customers?
  • What would you like to see improved on the form? Is there some way to make things a little bit clearer?

We will consider the information submitted through our website as we analyze the information we receive in the in-depth interviews to further revise the prototypes. This round is open for feedback until Tuesday, July 5, at 7pm Eastern time. You can participate any time between now and then, but the sooner you tell us the earlier we’ll be able to start thinking about how to improve on these forms for the next round. Send us your feedback today!

  • Ewarren

    This is a great leap forward from the current good faith estimate.  Both proposed documents are workable.  I personally prefer the Redbud document because the format on page 2 is easier to read and understand. 
    As a mortgage originator with 25 plus years of experience I can say that this is the first disclosure document I have seen that is easy to explain and easy for the consumer to understand.  Some very good work went into the design of this document.

  • XYX

    Either would be an improvement over the disaster we have after GFE 2010.  I suggest that you stop the focus, and maybe eliminate entirely the APR.  Very few customers (way less than 5%) understand APR or care about it.  APR is a useless item from the consumer viewpoint.

  • Stevecase

    I agree, the Redbud is an easier format.   Thanks.

  • Stevecase

    I agree, the Redbud is an easier format.   Thanks.

  • Joel

    Honestly, the consumer won’t understand either of these.  CFPB, like HUD, is trying to be too fancy with their new form.  The old GFE (pre-2010) made more sense.  Consumers understood them because they actually gave useful detail. 

  • Stevecampbell

    When the document  says ” this fee cannot change”   it may be confusing to a customer, as thou this fee cannot be negotiated to a lower number.  

      if someone is charging $ 10,000 in fees and  the document says ” this fee cannot change”  then as a customer I may look at that and think I can’t do anythign about those charges becase the document  says in black and white that it cannot change.    

  • Rganulin

    I like the Rosebud format on page 2. It is much easier to read.

    Bruin Belle

  • Spencer

    Redbud is definitely easier for the consumer to understand because it somewhat resembles the GFE prior to 2010.  GFE 2010 was a complete joke and very confusing for the consumer.  CFPB you are still over analyzing this.  Go back to the pre-2010 spreadsheet type of format.  It’s the same format the consumer sees when they go to close and get their HUD1 statement.  It’s what makes the most sense to anyone.

    All HUD did with GFE 2010 was confuse the consumer.  You guys don’t need to reinvent the wheel here.  Find a way to simply incorporate the important parts of the old one page TIL (APR – disclosure statements, etc) into the old pre-2010 GFE and you’ll have something better.  Otherwise, I think you’re wasting your time and confusing the very people you intend to protect…the consumer.

  • David E Whitcomb

    I like Redbud the most because it can itemize fees.  Unfortunately, the form as it is would change RESPA.  Appraisal fees, tax service fees, and flood determination fees should be subject to a 10% tolerance, not be in the “not allowed to change” category.  To meet the current RESPA requirements, those fees would be best fit in section F.    However, They don’t  fit in section E or F, because the borrower cannot shop for the services, they are lender selected.  There is still adaptation that needs to happen, or change in regulation.

    If the regulation changes to fit the the form, I do not want Redbud, because I do not want to have appraisal fees subject to a 0% tolerance, or any other fees that may fall into box A.

    I have grown accustomed to RESPA, and would like to keep it from digging any deeper into Lender’s pockets for tolerance violations that are caused by a new form, not a new regulation…

  • xyz

    The Redbud form is easier format as it resembles the GFE, and HUD-1, prior to the 2010 changes.  Prior to 2010 everything was itemized and easy to see.  The forms were much easier to explain and understand before the 2010 fiasco. 

  • JP Sexton

    I like Redbud better as it more closely resembles the pre-2010 format. This time, how about adding a signature line to the actual document?

  • Danbrown

    To me, there is no question about it, the Redbud version is more presentable and actually more clear.  the Dogwood version reminds me of an old loan form where the lener just checks the boxes.  I think the Redbud version is dynamic and more clear overall (page 2 of course).  From Dan, a banker for 34 years (most of which has dealth with Residential and Commercial Real Estate).

  • Danbrown

    To me, there is no question about it, the Redbud version is more presentable and actually more clear.  the Dogwood version reminds me of an old loan form where the lener just checks the boxes.  I think the Redbud version is dynamic and more clear overall (page 2 of course).  From Dan, a banker for 34 years (most of which has dealth with Residential and Commercial Real Estate).

    • Vickie

      The Red bud flows better as all you pointed out but you are missing the fact about the fee tolerances and the statement saying the subtotal can not change when in fact for appraisals and flood etermination fees those fees have a 10% tolerance

  • Clgavin

    I prefer the Dogwood form – the back page is much easier to read.

  • John Snyder

    The detail on page 2 of the Redbud document is more in the line on what the consumers are asking for in both the beginning and end of the transaction. I suggest an additional line under points for bona fide discount points. I really like the Total Estimated Funds Needed to Close section as i provides a much clearer understanding of who is paying what on a purchase transaction. I also suggest signature lines on both documents.

  • Linda Pryor

    I prefer the Redbud format because it’s easier to read. What about the amount financed? Shouldn’t the consumer know what fees are financed into the loan?

    • Sun4320

      Linda,
      To answer your question: I see the costs to be financed under Total Estimated Funds Needed to Close:
      “Total Closing Costs to be Financed: -0-

  • Jsator

    We need to go back to the pre 2010 good faith estimate and start all over by maybe adding a few new details.  The old form was easy to follow and included the credits to the buyer and showed the estimated funds to close.  This is the most important information to a buyer

  • Snance

    i would suggest a signature line and line where discount points  would be included.  I like the Redbud disclosure better but both are still better than the current

  • Cstewart

    Looking at it from a consumer standpoint, I prefer Dogwood.  Less cluttered and less intimadating.  I’ve been a lender for 38 years and there will be no substitute for one-on-one explanation at disbursment.  Either form is an improvement, but taking the time to share information and allow for questions is critical.

  • Jfciiiky

    While the HVCC is going to prevent one third of anyone from either purchasing or refinancing any mortgages in our state, if by chance we finally do get a 750 borrower through the agonizing loan process to provide them with a worst of all possible cases good faith estimate that any lender can undercut at any time, then we can show them exactly how much they will have to pay for their loans, which in all truth is much more than if we only had a one page GFE.
    That is, for those of us left still in business after Dodd Frank wiped out almost 150,000 loan originators.  Good thing two out of every three that apply may have a chance of approval provided they don’t get fired before they finish signing our 80 page loan application.  Did I mention that I love paying for 4506-T reports every five minutes?

  • Tony R

    This is a great improvement.  It captures the key information the customer needs to successfully complete their transaction and enter into it with knowledge that is more complete.  I think Dogwood is the least busy which is always easier for consumers plus how the fees that can and cannot change are handled better than Rosebud.

    Lastly, are you really using a Credit Union as the example FI?  I fear that this is a political statement by CFPB leadership.  In the markets my bank serves, traditional banks are doing a majority of the mortgages today not Credit Unions.  If you are trying to imply that credit unions are more interested in consumers getting “good” information you are simply wrong.  Most responsible banks have already created a custom document like the one you are showing here because the new GFE was so poorly conceived.

    I hope the CU example was simply an oversight not a political statement on behalf of the CFPB considering you partially relying on tax paying banks to support your endeavor.

    • Sue V

      Banks were used in the first samples.  I think the CFPB is just using different types of financials that do mortgage lending and are subject to RESPA as examples and this is not a political statement.  Please don’t start a bank versus credit union debate as that is not the purpose of this forum.

    • Sue V

      Banks were used in the first samples.  I think the CFPB is just using different types of financials that do mortgage lending and are subject to RESPA as examples and this is not a political statement.  Please don’t start a bank versus credit union debate as that is not the purpose of this forum.

    • CU employee

      I sure hope it is a political statement. It would mean the CFPB is walking the talk that it cares about smaller institutions like community banks and credit unions, not just the “too big to fail” banks that dominate most legislation and rulemaking in this country.

    • CU employee

      I sure hope it is a political statement. It would mean the CFPB is walking the talk that it cares about smaller institutions like community banks and credit unions, not just the “too big to fail” banks that dominate most legislation and rulemaking in this country.

    • CU employee

      I sure hope it is a political statement. It would mean the CFPB is walking the talk that it cares about smaller institutions like community banks and credit unions, not just the “too big to fail” banks that dominate most legislation and rulemaking in this country.

  • Ann W

    PLEASE ADD THE SALES PRICE AND DOWN PAYMENT SECTIONS TO THE TOP PART OF THE FIRST PAGE ON EITHER FORM!!!!      (refinances would have N/A in these areas, but first time buyers need these spelled out!)
    Ann Wilkinson
    Vice President Mortgage Lending
    Argentine Federal Savings

  • RhondaC

    One poster pointed out that the appraisal and flo0od determination has been moved from the changes that cannot change more than 10% to the charges that cannot change. This contradicts RESPA. If banks will still be subject to the tolerances, neither form adequately addresses the comparison charts for charges that cannot change, charges that are subject to the 10% tolerance and charges that can always change. Additionally, sometimes the title insurance is subject to the 10% tolerance and the closing attorney fees are not. There needs to be a way to separate out the title insurance from the title services into different tolerance categories. I also agree that a combination of the old TIL and the old GFE would be a better place to start.

    That being said, Redbud is easier to read because it lists out all the fees like the old GFE.  Still a long way to go to make it consumer friendly.

  • Dwarburton

    I agree that the Redbud disclosure is more palatable and allows for more title-related fee breakdown which is sorely lacking under the present requirements.

  • Holly Montoya

    The Redbud 2nd page is easier to read.

  • ismel

    I agree with the comment below regarding the confusion that can be caused by “This subtotal cannot change.” It creates the impression to the borrower that they have no negotiation power. Also, it contradicts the important dates section which states that the points can change if the rate is not locked.

    Also, there does not appear to be any place to include bona fide discount points. If the intent is to clarify to the borrower what they are paying for it would appear important to let the borrower know which fees are for the lender’s work and which fees enable the borrower to get a lower rate.

  • Srandall

    Redbud version is clearer.

  • Sun4320

    I personally love the Dogwood form: I appreciate that the Origination Fee is separate from the rest of the third party closing fees instead of lumping them all in one box. Borrowers are under the impression we are the ones charging and keeping all these fees. I also agree the appraisal fee needs to be in line with RESPA
    I do have an issue when listing the Owner’s Title Insurance fee. It is a hefty fee and it does not apply in most purchases as it is paid by the seller not the borrower. I do not think this is a true cost to the borrower; Still I have to add it to the third party closing costs and need to explain to the borrower that it doesn’t apply.
    If you are looking for transparancy, the Dogwood  forms is easier to understand for a first time home buyer. It breaks down every possible fee and to the whom it gets paid.  This is important to the Consumer. Specially with all the negative publicity about Loan originators and the public’s perception. THANK YOU DODD-FRANK!

  • Sky

    I agree with Joel, this form is much better, however, there are some costs like appraisals and title work that do change.  First, the title company and insurance charges do vary and although on a purchase, the customer cannot choose them, really, neither does the lender, this is usually picked by the seller or sellers re agent.  In fact, each company has a different closing price, and then if there is a renegotiation on a contract between the seller and buyer, the percentage of who pays what could change.  Then, there is the appraisal, now, while the bank does sort of select the appraiser, we don’t.  See, according to regulators, we, as lender’s should not be involved with the selection of an appraiser for a  loan, consequently, there is a revolving list of bank approved appraisers that are chosen on a next in line basis.  As lenders, we don’t see the list, so we have no idea who it is.  Consequently, not every appraiser charges the same amount for the same type of appraisal.  Those prices are determined by the appraiser (company) and since we cannot actually know who the appraiser is, we could possibly be up to 100.00 in either direction on this item.   Forcing these items  to be fixed will force us into constantly overdisclosing these costs instead of using an estimated average for all of our appraisers.   What happen to what a “Good Faith Estimate”  was supposed to be, and estimate of closing costs completed in good faith based upon  known variables.

  • SKYGAZER459

    I agree, the Redbud is an easier format.   Thanks

  • Twelle

    I prefer the Redbud form better. I beleive it would help the consumer to show on page one the “estimate of cash needed to close” since most will focus on page one for the recap. The second page volume of detail will loose less attentive consumers, of which my experience has found there to be many. I also think the second page could be organized differently to help the consumer distinguish between lender charges and third party charges and escrows for true shopping comparisons.   

  • Djones

    The Redbud version seems to be the most Consumer friendly and easy to understand. In general the Redbud version covers cost with a line by line listing which is good for total transparency of expenses. On the APR and definition of APR, I believe this is a very misunderstood item with Consumers. I would suggest inserting an asterisk *after the word fees and refer back to the itemized listing of fees so the Consumer knows exactly what the APR (cost of credit items) are in their loan. Also, it seems like the loan estimate should identify an estimated closing date/interest start date to tie to the pre-paid interest expense figure. The pre-paid hazard Insurance cost does not describe the period the premium is for either. Over-all this Loan cost change is MUCH BETTER than the current GFE and TIL.

  • Rmiller

    Redbud is a better document.  Section A:  I do agree with this subtotal cannot change will confuse the consumer and the appraisal should not be included in the no tolerance section.  Section B:  In Illinois the transfer tax is paid by the seller.  This should not be included as a borrower fee.  Section C, D, E:  Like the breakdown. Section F:  Owner’s Title Policy is paid by seller in Illinois.  This should not be included as a borrower fee.  Overall thought the breakdowns were clear and understandable.

  • Sue V

    I like the Redbud second page for ease of reading and that lender and seller credits are shown.  I concur with the other commenters about the loan fees that are in the “subtotal cannot change” area.

  • jo

    Redbud is easier to read and understand.

  • Janean Wood

    I think the “Redbud” version is more user friendly, I like the columns and
    the clear itemization of the fees.  Getting more similar to the old version we used to use.

  • Kathleen

    I like the Dogwood version better.  I think it is very clear cut and flows well.  I think it is layed out well and will be easier for the borrower to understand. 

  • Tlassere

    What about lock expiration date?

  • John

    Kudos to CFPB for attempting to correct the outrageous debacle that is the Good Faith 2010 model.  It is the most dysfunctional and counter-productive document I have ever encountered, and I am 64!

    As others have pointed out, the Redbud model should be tweaked to allow a tolerance in the pricing of appraisals, tax service fees and flood determinations. 

    In this state, Oregon, it is customary for the seller to provide an owner’s policy to the buyer.  I think that the Owner’s Title Policy cost should be a separate line item that is not calculated into the Cash Needed To Close.  Perhaps it could appear directly under that entry.  As shown on the Redbud model, the legend “not required” is, in my experience, likely to confuse clients more than help them.

  • Lena

    I like the  RedBud. Easier to understand.  I woudl also like to see a different settlement statement rather than a HUD.  No one other than people in the business can read the HUD and some of them can’t either.  Separate statement with all fees and charges set out is best. Easier to read and understand.  Most of us settlement agents have the seller and buyer sign a separate statement  in addition to the HUD.  Thanks for listening.

  • Sperra

    Redbud is better by far.  It will still be confusing, but the average consumer should be able to make more sense out of the Redbud if they read it and ask questions.  Our customers do not seem to “shop” around so they are totally baffled and frustrated by all of the disclosure forms. 

  • http://www.insurancegofer.com IG

    In my opinion I believe that the Redbud format is a little easier. There is not too much of difference, either one is fine to me. 

  • Feeleym

    I PREFER THE REDBUD FORM.  IT IS MUCH LIKE THE OLDER VERSION OF THE GFE.  THE NEW 2010 GFE IS AWFUL AND MAKES NO SENSE TO THE CONSUMER, LENDER OR SETTLEMENT SERVICE PROVIDER.  WHAT A MESS!  I ALSO FEEL STRONGLY THAT THE APR SHOULD BE ELIMINATED.  IT HAS BEEN AROUND FOR OVER 40 YEARS AND MAKES LITTLE SENSE TO THE CONSUMER AND IS THE CAUSE FOR MUCH CONFUSION.  THE CONSUMER CARES ABOUT THE INTEREST RATE, THE MONTHLY PAYMENT AND HOW MUCH IS THE LOAN GOING TO COST. 

  • syd1219

    On page 2 of both forms, the escrow section needs to include the aggregate adjustment or the cash to close amount will not be correct.

  • Judy Jewett

    1.       General: 
    a.       Mapping data using different font sizes cannot be done for older LOS systems.  This is very problematic.
    b.      How does the Fixed Rate disclosure differ from these disclosures?  Will there be a fixed rate version?
    c.       Redbud p2 seems more confusing to follow.
    d.      Is Loan Estimate the final name of the disclosure?
    e.      The shading on page 1 does not fax well.  Will the ‘unshaded’ to be acceptable.
    f.        Will there be Regulations amending TILA and RESPA that provide instructions for these new forms? 
    2.       Comparisons:  disclosing the total of the amount of principal, interest, mortgage insurance, and fees paid in the [initial fixed period on an ARM].  What fees are included?
    3.       Loan Terms (Both): 
    a.       The Yes/No bubbles with arrows are problematic, particularly for older LOS systems.
    b.      Is the printed data static with blanks if the loan is fixed rate?
    c.       It’s confusing to show the monthly payment at $2,311, which apparently does not include mortgage insurance (or taxes and insurance) – the initial payment of $1,446.10 includes MI.  So does this mean that MI has dropped off by year 7?
    d.      Prepayment Penalty:  what is expected in this blank?  What if the bubble is Yes?
    e.      Balloon Payment:  what is expected in this blank other than the balloon payment amount?   
    4.       Projected Payments:
    a.       What triggers the 2 different rates (7.75% and 3%) for years 6 and beyond?
    b.      Currently in the TILA disclosures, the mortgage insurance payment is included in estimated taxes and insurance portion of the payment.  The new disclosures include the MI in the monthly payment as does RESPA.  Will this change how the final TILA disclosures are done?
    5.       Loan Estimate Details (Both): 
    a.       Where are the current GFE Block 2/802 fees disclosed?
                                                                   i.      Discount Points?
                                                                 ii.      Temporary Buydowns fees?
    b.      Property Taxes that are not escrows – where are those disclosed in the current GFE?
    c.       Dogwood CU has Taxes and Recording Fees together. 
                                                                   i.      How will the tolerances work for this combined fee when one is 0% tolerance and the other is not?  Will the tolerances continue to exist?  The grouping of fees and the tolerances have to match.
    d.      Escrows: 
                                                                   i.      This is line item accounting and not aggregate accounting.  This may overstate the amount of escrows at closing.  The current GFE shows the total escrows which may include the adjustment.
                                                                 ii.      Are escrows included even if there is not an escrow account?  This amount is included in the Cash Needed to Close.
    6.       Adjustable Interest Rate Information:
    a.       Why repeat the ARM disclosures here?
    b.      Under Change Frequency, says that the First Change begins on the 61st month.  This is Rate information, so the rate actually changes on the 60th month for a payment change on the 61st month.  See TILA rules.    

  • Lsmith

    I think the Disclosure was great it looks like a dream come true.

  • Sandra bortree

    I prefer the Redbud Estimate.  It is easier to understand and spells out the charges clearly.   The current form is too complicated and consumers are confused by it.

  • dplindsey

    I prefer Redbud, as it gives a better, more helpful breakdown of closing costs to the borrower (and, as necessary, to their advocate). 

  • Dan

    Redbud is much better.  That’s because it looks more like the old GFE, which is still better than either of these.  Pg 2, Section A, Subtotal reads, “This subtotal cannot change”.  This is misleading, as it can change with a Change of Circumstance, like a change in purchase price.  Why can’t we give the customers a complete breakdown of their monthly payment, including taxes and insurance.  We also need to total this for them.  Why do they have to scramble over both pages to add up the numbers to get total monthly payment? 

  • lasmall

     I am thinking this form will be given to a consumer when they are beginning their search for a home or refinance, to give them a tool to shop mortgage rates and fees, not a Good Faith Estimate that is given at time of  an actual application because it is lacking the best parts of the new GFE’s, the lock information and 3 loan scenarios.   I offer these suggestions to make the form for shopping easier to explain and understand.  I preferred the Redbud Estimate for clearer disclosure, it is much like the old GFE’s, however I believe it will be problematic for current loan software as they have been switched to a form more closely aligned to the Dogwood form. The Dogwood Form is more correct, separating the 0 tolerance origination section from fees with a 10% tolerance level.  I think the Loan Comparison form should closely align to the Good Faith Estimates that are given at time of qualification/application, so the Dogwood form may be more practical from that standpoint unless GFE can go back to the older format similar to the Redbud form.   Careful attention needs to be given to the areas of tolerance limitations to be sure items line up according to RESPA/TILA/tolerance levels and items that may be shopped, before a final form is mandated.    You may consider adding the 3 loan scenerio page to the loan shopping form so lender can present several programs when consumer is shopping, or several of these sheets would need to be prepared for each one.  It would save paper if one sheet was added to this showing several other loan programs.  If consumer left one lending office with only one scenario  the next lender may show them a higher or lower interest rate than the one the previous lender showed them, consumer should have several comparisons of costs associated with rates/programs to do comprehensive shopping by adding one page to form.
    Here are some suggestions for the loan estimate shopping tool:1.  Add area for a sales price on top right of first pageI love the Loan terms section with the added explanations on ARM loans on the first page and bottom of 2nd page2. Add line items  under projected payments section to breakdown monthly taxes, homeowners insurance, mortgage insurance, condo or hoa fees – as they will be shopping for insurance and comparing monthly hoa fees3. Delete “subtotal cannot change” from Redbud form as some fees included in this box have a 10% tolerance, not 0% I don’t think any ironclad verbiage should be used on a shopping form, there is a disclaimer under the important date section concerning rate and points and it does give an explanation that all other fee quotes expire same day when shopping.  It is the GFE that needs the ironclad wording.  It could confuse consumer when words like “cannot change” or “cannot exceed” are added to a shopping form.4. Can seller fees such as transfer tax and owner’s title fee be eliminated from fees disclosed to a buyer? That is confusing and hard to explain to buyers, it is now mandatory to disclose but buyers are not paying it and LO’s are in an awkward position explaining that is shows as a buyer cost but buyer doesn’t  pay it – unless it is on their purchase contract which is not customary.  Your model even indicates Owners Title Policy fee is (not required), why must it be on estimate of costs? That confuses consumers.5. Add a note under Adjustable Interest Rate Information-to alert consumer that they need a Consumer Handbook on Adjustable Rate Mortgages if they are considering an ARM.  A side note;  A history/chart of the indexes should be developed so they can see and compare indexes  as there are a number of them used,  Libor, 1 year Treas. etc. Indexes and fixed rates can be contrasted in an visibly easy to digest chart as part of the disclosure, it would aide the loan officer ‘s explanation and help consumers make a more informed choice as they could clearly see how the various indexes compared to fixed rates over a 10-20 year period.  The format in the Consumer Handbook is not easy for consumer to understand in my opinion.6. Consumer can shop for flood/hazard insurance,  I like the format best on Redbud  as consumer and lender can go over each line item.  Be sure there will be ways to itemize additional fees such as certifications for roofs, well reports, septic, looks like those can be “lumped” into inspections and surveys but it is preferable to have enough room to clearly itemize additional cost if needed so they know exactly what they may be paying for, it looks like there are lines to do this on Redbud form.  Lenders will need additional software for any new form created so the more in tune forms are to each other, the loan comparison sheet and GFE, the better, in my opinion to make it less confusing and easy for both the consumer and lender to go over together.  If consumer comes back in and wants to begin a loan, I want to present a GFE form that is consistent with the loan comparison form used when they were loan shopping.Hope this helps Note the Flood and Hazard Insurance Premium are fees the consumer can shop for, escrow and title on refinances should be items allowed to be shopped for.  Currently title and escrows on purchases are not customarily allowed to be shopped for in the case of REO and short sale properties.I think the APR disclosure on this form is much more consumer friendly and the information in Comparison section on bottom of first page is a welcome addition.5. Change “Escrow for Future Bills” to Escrows for Future Tax and Ins. Bills 6. I feel that also including 3 loan scenarios on the current GFE’s would be helpful when shopping for a loan

  • MFB

    Speaking for a group of Loan Officers, we like the REDBUD form and agree that even if there is no additional change to the form it is a great improvement from the current GFE.  Our comments are:
     
    ·         The form has line for “owner’s title policy” (not required) and a line for “Lender’s Title Policy”.  First, it will only confuse the borrowers when there is a fee in the “owner’s title policy when it states “not required” by it.  If there is a fee in the Owners title policy,  it is obviously required for some reason or another.  Second, why is the title policy charges even split out?  If it is a purchase, the owner’s title policy is paid by the seller and is stated on the HUD statement.  If it is a refinance, the entire title insurance is paid by the borrower/owner and should be included in the ONE line that should be labeled Title Insurance.
    ·         Instead of “points” use the term “Lender’s origination fee”
    ·         Add a line “discount points”  to be used if the borrower is wishes to purchase a lower rate.
    ·         Have a line for “Recording fees” under section B

  • Djhouston

    Why can’t we give the customers a complete breakdown of their monthly payment, including taxes and insurance. We also need to total this for them. Why do they have to scramble over both pages to add up the numbers to get total monthly payment? Thers should be a final section at bottom right corner of the page like the old GFE(pre-2010() that shows the “estimated” PITI. Borrowers want to see that!!! 

  • Djhouston

    ALSO…ADD a line to show the purchase price!!! Refinances would have an N/A substituted

  • Djhouston

    Rosedbud option for sure, but…There ought to be a separate section that is titled Estimated total monthly payment that shows not only the principal and interest payment but also the estimate for monthly taxes and insurance like the old GFE. Borrowrs WANT to see an estimate for their TOTAL monthly payment. Section A should have a line for credit report. Also, ALL the sections should have option to add an item titled something other than the items that are pre-printed. Also there should be a line for the purchase price at the top before the loan amount. 

  • Djhouston

    ****ALSO…PLEASE add a signature and date line to the GFE so that there is proof that the borrower received and reviewed the GFE. I could not believe it when at the last minute the signature line was removed form the final GFE that was revised last year. I predicted correctly that banks would require a new form(MORE dead trees) to be signed by the borrower to show they received the GFE!!! How ridiculous is that when that could have been handled by the GFE form by having a signature and date line. Not only did banks not come up with a form for us to use BUT we had to create our own for the borrower to sign until finally Calyx point added a letter of Intent to proceed form which also had a line on it that stated the borrower had also recived A GFE on a partcular date. WHAT on earth was HUD thinking when they created a form that they said was suppose to be such a BIG change to help the borrower get better information(which it did not!!!) and binding fees…YET had no signature and date line to prove we the brokers had EVER even sent the borrower a GFE!!! LUNACY!!!!

  • Anonymous

    Redbud option for sure, but…There ought to be a separate section that is titled Estimated total monthly payment that shows not only the principal and interest payment but also the estimate for monthly taxes and insurance like the old GFE. Borrowrs WANT to see an estimate for their TOTAL monthly payment. Section A should have a line for credit report. Also, ALL the sections should have option to add an item titled something other than the items that are pre-printed

  • Anonymous

    ****ALSO…PLEASE add a signature and date line to the GFE so that there is proof that the borrower received and reviewed the GFE. I could not believe it when at the last minute the signature line was removed form the final GFE that was revised last year. I predicted correctly that banks would require a new form(MORE dead trees) to be signed by the borrower to show they received the GFE!!! How ridiculous is that when that could have been handled by the GFE form by having a signature and date line. Not only did banks not come up with a form for us to use BUT we had to create our own for the borrower to sign until finally Calyx point added a letter of Intent to proceed form which also had a line on it that stated the borrower had also recived A GFE on a partcular date. WHAT on earth was HUD thinking when they created a form that they said was suppose to be such a BIG change to help the borrower get better information(which it did not!!!) and binding fees…YET had no signature and date line to prove we the brokers had EVER even sent the borrower a GFE!!! LUNACY!!!!

The CFPB blog aims to facilitate conversations about our work. We want your comments to drive this conversation. Please be courteous, constructive, and on-topic. To help make the conversation productive, we encourage you to read our comment policy before posting. Comments on any post remain open for seven days from the date it was posted.