The intent of the new GFE regulation is to require a FIRM cost estimate. Once issued a GFE cannot change unless there are “changed circumstances.” This eliminates the “bait and switch”.
The original information cannot be a basis for the change, unless it is later found inaccurate. If there is a changed circumstance, then it can only change that aspect of the costs that it affects; i.e.: title problem > title insurance or credit score > interest rate. Any changes have to be issued within 3 days of discovery – by whoever discovers the change. The lender or broker can revise the GFE, so communication is crucial. Retain documents that relate to the change for 3 years.
Not Changed Circumstances
|
Maybe, depending
|
Yes
|
· * Any accurate information provided prior to GFE borrower
· * Broker issued GFE inconsistent with wholesaler’s
· * No property address at application
· * Broker changes from one investor to another
· * Market changes
|
· * Borrower delays closing
· * Original vendor goes out of business
|
· * Acts of God, war, disaster, emergency
· * Borrower changed: credit quality, loan amount, property value
· * New information
· * MIP/PMI factors changed
· * Credit policy/Regulatory change
· * Incorrect legal address initially supplied
· * Undisclosed title or property issues
· * Borrower changes occupancy status
· * Borrower selects POA closing
· * AVM – “No hit”
· * Credit score change
|