Portland Real Estate Update by Janeese Jackson » changes in the mortgage industry http://fabulousportland.com all about Portland Oregon including real estate, investment properties and general "of interest" Wed, 08 Feb 2012 19:08:48 +0000 en hourly 1 http://wordpress.org/?v=3.2.1 More Changes Coming in the Mortgage Industry! An FYI for Portland, OR Buyers & Sellers! http://fabulousportland.com/2009/12/26/more-changes-coming-in-the-mortgage-industry-an-fyi-for-portland-or-buyers-sellers/ http://fabulousportland.com/2009/12/26/more-changes-coming-in-the-mortgage-industry-an-fyi-for-portland-or-buyers-sellers/#comments Sun, 27 Dec 2009 00:02:22 +0000 Janeese Jackson http://fabulousportland.com/2009/12/26/more-changes-coming-in-the-mortgage-industry-an-fyi-for-portland-or-buyers-sellers/ Again, more changes coming in the mortgage industry!  This time it involves “Good Faith Estimates” for potential buyers.  In order to compare “apples to apples” you must compare a combination of elements when interviewing Mortgage Brokers to partner with you on your next real estate transaction.  One of the first is to speak with other friends or trusted advisors (such as your Real Estate Broker) to get the names of mortgage brokers they have found reliable and referred.  The 2nd step has always been to ask for a “Good Faith Estimate” or GFE.  A GFE has always been a list of closing costs to acquire the loan plus the most appropriate interest rate available from the lenders available to that Broker and, finally, the monthly PITI (principal, interest, taxes, insurance).  Beginning January 1st, 2010 we will see some changes in the industry.  Now a GFE will be more akin to a “Truth-in-Lending” document that was formerly provided during the loan process and, again, with the closing papers.  Truth-in-lending gave you the APR or annual percentage rate (the full cost of the loan including closing costs) and the total of your payments over the life of the loan (never a pretty sight).  Now GFEs will look more like truth-in-lending and the other information, such as closing costs and PITI will be in a summary sheet provided by each mortgage brokerage house.  Another big change is the new requirement for getting a GFE from a mortgage broker or lender and that will include pulling a credit report.  Thus, receiving this document will take a bit more time!

Other changes include that the “Owners Title Policy” (usually a seller paid cost) will show up on the buyer’s GFE (and will be very confusing for buyers…just know to subtract that amount, but it must now be disclosed). Also, the escrow officer in charge of preparing the documents for signing and recording must now compare the original GFE to the final HUD closing document to make sure they are in line.

Just know that you will want to compare both the GFE and the summary to get a true picture of which loan would fit your needs.  This is simply another example of the pendulum swinging (and, perhaps, occasionally “over-swinging”) to compensate for the former “loosey-goosey” lending practices that helped propel us into this new era of real estate.  Sighhhhhhhhhhhhhhhhhhhhhhh!  However, the good news is these new regulations will force marginal Mortgage Brokers to stay the course on fees.

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