In an effort to further clean up and regulate the mortgage industry, the Fed is considering changing how mortgage originators are paid. The proposal would make it cheaper for people buying expensive houses and in many instances eliminate people with disabilities or lower income from being able to purchase. I have a hard time imagining this is an unintended consequence since the proposal was drawn up by attorneys who according to Paul Mondorf, an attorney for the FED, were certainly the ones who know how the mortgage industry works and were qualified to take this on. why would any one ever consider asking for input from any one in the mortgage industry? Since the attorneys were deemed to be the correct authors, I find it most interesting that it would be so blatantly transparent to even a lowly mortgage person like my self that the benefactors of the proposal would be the rich and the ones punished would be the working class and disabled. In the upcoming weeks more information is going to be presented to the Fed. We will see if armed with more information (some of it coming from mortgage experts if you can imagine) if the unintended consequences were unintended or not. Stay tuned.
Dec
Starting today, actually January 1st, 2010, buyers will no longer get regulated Good Faith Estimates when they are pre-approved for a loan. Actually you will no longer get preapproved for a loan. From now on when you submit all of the necessary information and documentation to get a home loan before you go out shopping for a home, you will be pre-qualified and not pre-approved.
The “old” Good Faith Estimate use to tell you all of the fees and costs involved with getting a home loan line by line. It, also, included your potential house payment and the total amount of money you would need to have for closing your home loan and purchasing your home. The “new” GFE no longer gives line by line info for everything, just shows fees in totals or clumps for some things. No where on the GFE is the house payment or the total amount of dollars you will need. The “new” GFE will be issued after you actually have a property and once it is issued few changes can be made.
So pretty much every lender has created a new form called such things as closing cost estimate or closing cost work sheet or closing cost worksheet estimate and I am sure that is just the beginning of the names. these forms will hopefully disclose all of the information necessary for home buyers. These estimates will have more info than the GFE and be used up until the GFE is issued. Since these forms will not be standardized like the old Good Faith Estimate forms it will be more challenging for borrowers to shop and decipher loans before purchasing.
Most likely you will not get a Good Faith Estimate until you have purchased a property and long after you have an established relationship with your Mortgage Planner. You will be prequalified and provided estimates on a different form. No longer will a lender be required to give you a GFE when you get pre-qualified, only after you purchase or give your loan person a property address.
More info and consequences on the “newest form” will be provided.
Cristie is a Certified Mortgage Planning Specialist with over 15 years experience originating home loans. She taught 46 Commission sponsored seminars in 2008 and has been teaching classes for 13 years. 
