One of the many unsavory features of the home loan market is that borrowers, when they close on their loans, sometimes find their settlement costs substantially higher than the earlier estimates given to them in the Good Faith Estimate of Settlement (GFE). Lenders are required by law to provide the GFE to borrowers within three days of receipt of a loan application, but the GFE is sometimes used in bad faith. Some lenders as a matter of course raise their fees or add new ones as a loan moves toward closing. This is especially easy to do on purchase transactions when borrowers pass a point where there isn't time to begin again with another loan provider. Some lenders low-ball third-party fees as an inducement to borrowers who believe they can shop total fees, then raise them at closing. HUD tried to deal with this and many other problems a few years ago with a proposal that allowed lenders to package a mortgage and all related services, which would be offered to borrowers at a single...
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