This is the final part of the ongoing “Are we completing our GFEs correctly?” series.
“Are we completing our Good Faith Estimates (GFEs) correctly?” This is how I started out my previous blogs (here, here, and here) and if you read them, you discovered that most credit unions are not completing the GFEs correctly…so we continue today with one more common mistake.
Today’s common mistake: The use of the correct GFE form.
That’s right, this common error is simply (and sometimes inexplicably) the use of the incorrect form! I can’t tell you how many credit unions I have worked with that were either using an out-dated (and out of compliance) GFE or were neglecting to use one at all!
Part 1024.7 of The Real Estate Settlement Procedures Act (RESPA) states that a lender is to provide a GFE no later than 3 business days after the lender receives an application, or information sufficient to complete an application for a federally related mortgage loan. Also, as a reminder, GFEs do not need to be provided for HELOCs if the lender is providing the proper Truth-In-Lending disclosures.
Additionally, the Department of Housing and Urban Development (HUD) revised RESPA, which included significant changes to the GFE effective January 1, 2010.
So…of all the possible mistakes you can make, please make sure you are not committing the biggest one of them all! Make sure you are using the correct form!