AgentMortgage

Good faith estimate not set in stone

Lender can manipulate numbers to hook borrowers

Q: My loan officer gave me a Good Faith Estimate that shows the interest rate, term, loan amount and a listing of all settlement costs, including lender and third party charges. My plan is to use this document to shop different brokers/lenders to find the best deal. Is this a viable shopping strategy? A: NO! The loan provider who gave you the GFE is not bound to any of the numbers on it. The numbers shown might have been given in good faith, but often they are just lures designed to hook the borrower. The loan provider in such case has no intention of delivering on them. The GFE, short for Good Faith Estimate, shows the interest rate, term, loan amount, and all settlement costs on a particular loan. The items on the GFE can be divided into three major groups: interest rate and points, fixed-dollar loan fees, and third-party charges. An unscrupulous loan provider can manipulate all of these. There is no legal liability for errors on the GFE. The interest rate shown on the GFE, even if ...

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