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The main change is how lenders communicate fee information to borrowers. Under the old system, there was no standardized format. “Fees were communicated in multiple ways, which adds to the confusion when comparing costs,” says Keith Gumbinger, a vice president at HSH Associates, which tracks the mortgage market. Under the new rules, lenders will all be required to use the same form for their Good Faith Estimates – a three-page document issued by HUD.
There are also new rules capping increases in costs that are disclosed on the Good Faith Estimate and guidelines so that fees listed on the initial GFE reflect the actual cost at settlement.
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