New Good Faiths, not so good

I have been unable to blog the past week due to market changes and adapting to the new Good Faith Estimate. What seemed simple in theory has turned into a mess for lenders and home buyers/borrowers.

The trouble so far is that the new good faith estimate is so poorly designed that it tricks buyers into thinking higher costs for loans are being presented to them. The new GFE blocks most all lender fees into one section called “origination charges.” It shows this on top of listing origination fee or discount points.  Instead of adding transparency to mortgage banks this new form has turned into a nightmare for us all making borrowers and lenders shaky as they contemplate moving forward on a home loan.

What the brilliant people at the FED don’t realize in their inability to fix ANYTHING is that when they make a change like this new GFE, lenders double the time they spend with each borrower — first, explaining the new form and how odd it is compared to the plain english approach to the old GFE; second, as lenders, we are penalized for any mistakes on the estimate itself even small variances in fees that lenders have no control over such as title, transfer and some insurance fees.  As everyone knows, when you double the time an employee spends on anything, eventually, costs will go up. Why our pals up on the hill can’t figure out the basics of economics is beyond me.

As a lender, I am 100% honest with my clients and I’ve never mislead a buyer into a fee that was not valid. I can say that for almost every lender I know. I am sickened to think that we as lenders may be forced to charge more to our buyers to give them the same great service they deserve and we’ve always given.

Now that we’re getting the hang of this new set of rules I am hoping that everyone gets back into the groove of things by next week.

On a better note, I hope everyone smiled when my prediction came true regarding interest rates coming down around the 11th of January! Here is my gift to you, as rates are still great here at Urban Austin Mortgage …

Todays Rates:

30yr Fixed- 4.75% 0+1

15yr Fixed- 4.25% 0+1

FHA/VA 30yr- 4.875%

USDA 100% financing- 4.875%

Any and all questions can easily be answered over the phone or via email any time.

Sincerely,

D. Stephen Steakley, Jr.
Austin, Texas Home Loan Expert
512-577-8898 ph

UA website - Austin Texas Home Loans
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