CORP. NMLS#167441
1For business and professional use only. Not for Consumer Distribution.
NDC GFE GuidePMAC Lending Services, Inc.,
February, 2014
Disclaimer:This guide provides basic information about RESPA requirements. It is not a substitute for the RESPA guidelines published and regulated by the CFPB, nor is it intended to be an interpretation of the RESPA guidelines. In the event of discrepancies, the official guidance should be followed. The final regulation and additional resources can be found at: http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&SID=9cab7962ab7aa3e468e911638c817e0b&rgn=div5&view=text&node=12:8.0.2.14.17&idno=12
CORP. NMLS#167441
2For business and professional use only. Not for Consumer Distribution.
Purpose
Understand GFE requirements
Recognize GFE errors
Understand Changed Circumstance
Understand when re-disclosure is and is not required
CORP. NMLS#167441
3For business and professional use only. Not for Consumer Distribution.
Delivery of the GFE
The initial GFE prepared by the Broker in a transaction is the binding GFE
The GFE must be prepared within 3 business days of the loan application
The GFE must include the names of all the borrowers
RESPA defines an application as receiving the following minimum items required to issue a GFE:
Borrower’s Name
Borrower’s Social Security Number
Borrower’s Monthly Income
Property Address
Property Value
Loan Amount
CORP. NMLS#167441
4For business and professional use only. Not for Consumer Distribution.
Important Date – Floating Rate
• Line 1: Must be the date of the GFE or after
• Line 2: Must be at least 10 business days from the date of the GFE,
• Excluding Sunday and Holidays
• Line 3: Cannot be empty – 0, N/A or a number are acceptable
• Line 4: Cannot be empty – Must be 1 or greater
CORP. NMLS#167441
5For business and professional use only. Not for Consumer Distribution.
Important Date - Locked Rate
• Line 1: Must be lock expiration date
• Line 2: Must be at least 10 business days from the date of the GFE,
• Excluding Sundays and Holidays
• Line 3: Must be the number of days of the lock term
• Line 4: Must be 0 or N/A - Cannot be empty
CORP. NMLS#167441
6For business and professional use only. Not for Consumer Distribution.
Summary of Your Loan
• The Summary of Your Loan section must match current terms shown on the 1003 and TIL.
• Loan amount (must be NOTE LOAN amount on Government loans with financed MIP or Funding fees)
• Loan term
• Interest rate
• Initial monthly
payment
• Questions pertaining to an
ARM loan, Negative Amortization loan, Balloon loan or
Prepayment Penalty must be completed
CORP. NMLS#167441
7For business and professional use only. Not for Consumer Distribution.
Summary of Your Loan (cont.)
Escrow Account Information
• The monthly payment must match the payment in the summary of your loan section.
• The appropriate impound box must be marked
CORP. NMLS#167441
8For business and professional use only. Not for Consumer Distribution.
GFE – Block 1
Origination Charge
Block 1
The fees disclosed in Block 1 will include fees paid to you, the non-delegated correspondent, and PMAC.
Some examples:
• Processing
• Administrative fee
• Origination
• Underwriting
• Application fee
• Block 1– Cannot increase unless the loan amount increases and the origination or mortgage Broker fee is disclosed as a percentage of the loan amount on the original
Fee Worksheet or Itemization of Amount Financed
• PMAC will net fund our fees from the origination fees
CORP. NMLS#167441
9For business and professional use only. Not for Consumer Distribution.
GFE – Block 2
Your credit or charge (points) for the specific interest rate chosen
Block 2
One of the 3 options must be selected:
• Box 1: Used for Par Pricing Scenario
• Box 2: Used for Lender credits to cover third party closing costs
• Box 3: Used in the event the loan has discount points
CORP. NMLS#167441
10For business and professional use only. Not for Consumer Distribution.
GFE – Block 3
Required Services
These are charges for services the Lender requires to complete the transaction
Block 3
Examples:
• Appraisal
• Credit Report
• Tax Service
• Flood Certification
• Up-front Mortgage Insurance Premiums (UFMIP) (must be disclosed, even if it is being financed)
• VA Funding Fee (must be disclosed, even if it is being financed)
• Condo certification
CORP. NMLS#167441
11For business and professional use only. Not for Consumer Distribution.
GFE – Block 4
Title Services and Lender’s Title Insurance
Block 4
Examples:
• All Charges associated with the title services and settlement (closing agent services)
• Subordination (if prepared by closing agent or title company)
• Miscellaneous Fees are not allowed: fees must be specific
CORP. NMLS#167441
12For business and professional use only. Not for Consumer Distribution.
GFE – Block 5
Owner’s Title Insurance
Block 5
• Disclosure required on all purchase transactions even if it is going to be paid by the seller
• 0 or N/A is acceptable on refinance transactions
CORP. NMLS#167441
13For business and professional use only. Not for Consumer Distribution.
GFE – Block 6
Required Services the Borrower Can Shop for
Block 6
• Examples of Services that Borrowers CAN shop for:
• Pest Inspections, Survey, Re-Key Fee, Transaction Coordinator, Natural Hazard Disclosure Report
• Examples of services that Borrower CANNOT shop for:
• Notary Fee
• Only the Lender required services must be disclosed
CORP. NMLS#167441
14For business and professional use only. Not for Consumer Distribution.
GFE – Block 7
Government Recording Charges
Block 7
• This block must have a fee disclosed.
• Fees in this box cannot change without a valid change of circumstance due to loan amount change
CORP. NMLS#167441
15For business and professional use only. Not for Consumer Distribution.
GFE – Block 8
Transfer Taxes
Block 8
• The amount cannot increase but may decrease
• Increases have zero tolerance unless loan amount increases
• City/County/State tax stamps
• Can be called recordation tax, intangible tax, excise tax, doc stamps, deed stamps, mortgage stamps etc.
• Not just on purchases. Some areas have a transfer tax on refinance transactions.
CORP. NMLS#167441
16For business and professional use only. Not for Consumer Distribution.
GFE – Block 9
Initial Deposit for your escrow account
Block 9
• The dollar amount must be complete when the loan has escrows
CORP. NMLS#167441
17For business and professional use only. Not for Consumer Distribution.
GFE – Block 10
Daily Interest Charges
Block 10
• Daily interest amount
• Number of days
• Anticipated settlement date with a total interest charge
CORP. NMLS#167441
18For business and professional use only. Not for Consumer Distribution.
GFE – Block 11
Homeowner’s Insurance
Block 11
• Hazard
• Flood
• Hurricane
• Earthquake
• Purchase Transactions
• Premium due is required to be disclosed on all purchase transactions
• Refinance Transactions
• Existing policy premium due does not need to be disclosed
• New policy premiums must be disclosed
CORP. NMLS#167441
19For business and professional use only. Not for Consumer Distribution.
Service Providers
• A Service Provider List (SPL) is required on all transactions, even if the borrower is not allowed to shop for any services. It must be loan
specific and include verbiage that states the borrower is not required to use the service provider listed.
• Different formats are acceptable provided they meet minimum requirements.
• If you are allowing the borrower to shop for services, the list should include local service providers.
• An address and phone number for the service provider must be included
CORP. NMLS#167441
20For business and professional use only. Not for Consumer Distribution.
GFE Common Errors
Common GFE errors to avoid
• All three (3) pages of the GFE are required and must be legible
• GFE must match the original Fee Worksheet or Itemization of Amount Financed
• Date of GFE must be within 3 business days of the initial 1003’s interviewer date
• Date in line 2 of Important Dates Section cannot be less than 10 business days (excluding Sundays and Holidays)
• Corrections to typed GFE’s are not acceptable
• Amounts in A + B do not balance on page 2
• Owners title fee missing on a purchase transaction
• White out on the GFE is not acceptable
• Resubmission is not allowed as a means to increase origination
CORP. NMLS#167441
21For business and professional use only. Not for Consumer Distribution.
Change of Circumstance
Change of Circumstance is …
• Changed situation or inaccurate information provided by the borrower after issuance of the GFE
• The revised GFE must be issued within 3 business days of discovering the change or being notified of the change
• Any revised GFE must be documented on the Changed Circumstance Form and must included the following
• Date of Change
• Date of Re-Disclosure
• Detail of Change
• Indicated fees changes is associated with the changed circumstance
• Changes of circumstance that occur prior to submission are required to be submitted upfront.
CORP. NMLS#167441
22For business and professional use only. Not for Consumer Distribution.
GFE Guide
Brought to you by
PMAC Lending Services Inc.