FHA Chief: New Mortgage GFEs Must Be Offered Jan. 1

FHA Commissioner David H. StevensThe Federal Housing Administration is clearing up some confusion about its new Good Faith Estimate (GFE) forms required of mortgage lenders, brokers and closing agents starting Jan. 1.
The goal of the new forms is to expand and clarify disclosures to borrowers when applying for a mortgage, and by doing so promote better comparison shopping, U.S. Housing officials say. They project that the new form could save consumers an average of nearly $700 in mortgage costs.
Last month, U.S. Housing officials put out a news release stating it would exercise restraint in enforcing the new GFE for 120-days to FHA-approved lenders “who demonstrate a good faith effort to comply.”
“The idea that lenders, brokers and closing agents can delay implementing the new Good Faith Estimate and HUD-1 Settlement Statement beyond January 1, 2010, is incorrect,” said FHA Commissioner David H. Stevens in a statement posted this week.
Stevens said that after Jan. 1, the only circumstance where the old form can be used is if the GFE was issued in 2009 on an old form.
“There should be no confusion about when the mortgage industry must begin using the new forms,” Stevens said. “That date is January 1, 2010.”
The improved GFE is part of new regulatory requirements under the Real Estate Settlement Procedures Act (RESPA), due to take full effect on January 1. The new RESPA GFE rule became effective on January 16, 2009, but officials provided a one-year transition period for the mortgage industry to incorporate the changes.
“We have conducted a series of information sessions, webinars, conference calls and presentations to help the industry prepare for the RESPA changes,” Stevens said.
For more information, see the FHA’s portal site.

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