Despite many comments from many different angles opposing the change, HUD has gone ahead and issued rules for a new Good Faith Estimate and HUD Settlement Statement. Even with contradictions to the Truth In Lending Act [Reg Z], HUD has gone forward. This new Good Faith Estimate [GFE} will lump settlement costs into categories and some will have certain tolerance levels for changes and some will not. There is no place for signatures, no outline of escrow payments and how it would affect the monthly payment, and no place to disclose just how much money a consumer will actually need to close a transaction.
There are a number of restrictions placed on a lender, too, including one that will likely preclude the provision of a Good Faith Estimate to a consumer looking to do a pre-approval. Since a lender will be held to certain figures EVEN if the loan amount and purchase price [another notable absence from the form] changes, no lender will be willing to provide a written GFE in advance of a property being identified. So much for consumers having a tool in advance to compare offerings.
Mortgage Brokers could feel the squeeze, too, as lenders may not want to be held responsible for documents not originated by the lenders themselves. Since this begins on January 1st, and HUD has not even published new settlement cost booklets for consumers, expect this to be another delay factor in buying and financing a home.