Good Faith Estimates

The Good Faith Estimate is part of RESPA and on October 3rd, 2015, TRID took effect in the lending industry. TRID is the merger of documents, supposedly designed to help the consumer better understand the cost associated with their mortgage loan. TRID = Truth In Lending RESPA Integrated Disclosure.

Under TRID, the Loan Estimate or “LE” is now used in place of the Good Faith Estimate on primary and secondary residential properties, whether a purchase or a refinance. The Good Faith Estimate can still be used for other types of real estate purchases, such as investment properties purchased by a corporation or LLC, land purchases, and commercial properties. However, you are more than likely to still see the creditor provide you with a LE, versus a Good Faith Estimate, simply because all or most of the creditors have now changed over their software programs to use only the LE.

The Good Faith Estimate was a form containing several pages, and was most often followed by a summary sheet of the expected cost called the Fee Worksheet.

Both the Good Faith Estimate and the Loan Estimate list all the costs one could expect to pay associated with the mortgage loan, whether a purchase or refinance. Both forms contain any and all possible fees. This does not mean you will be charge or experience all the fees or expenses listed on any of these forms. It just simply means that if you were to be charged any of the fees for something associated with anything listed on the forms that should be the maximum cost for that item.

Certain items have a zero tolerance while some items are allowed to be adjusted up or down. If the adjustment is up in cost to you the consumer a new GFE or LE must be sent to you along with the “Notice of intent to proceed” which must be signed either electronically or traditionally and sent back to the creditor before the mortgage loan process can proceed forward.

If you have any questions or would like further assistance please contact us directly and we will try our very best to help wherever possible.

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