Profile picture for cvgalloway

A New GFE??

We started out with a GFE of $7,188.37
And now the day before underwriting I'm told that MI Premium was left off ($4400) and was provided with a second GFE of $14,905.37 - and quickly realized there were other things left off.

Owner's Title Insurance had N/A ($1409)
MI Premium - left off ($4400)
Termite Cert - left off ($125)
Initial deposit into escrow - changed from $1200 to $1650
Homeowner's insurance - left off ($1352)

Based on page 3 of the GFE, it states certain items could change at settlement - so homeowner's insurance, initial deposit into escrow - I expected that
it states can change 10% (unless I selected the companies - which I did not, but found out that my realtor told them to use a specific Title co) - title services, owner's title insurance
MI Premium is not on the list of these that cannot or can be changed - where does this fall?
Can they say - oh, a new GFE is required?  Which items can/should be changed prior to settlement?

And also - there have been NO CONDITIONAL changes on the loan - the LO just forgot these things.

Thanks for all your help. 
  • October 15 2010 - Denham Springs
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Answers (12)

Termite reports aren't required so it doesn't matter if that was on the GFE or not. They're an optional item.

Your initial GFE will state who is the lender selected title company, if that's the one that you are using then their can only be a 10% variance. Owners policy would fall under that. However if the other title charges were overstated enough then it could still be enough to cover the $0 owners policy. The 10% variance is for the total amount.

It sounds to me like the lender will be paying your UFMIP. (90% of it anyhow)
  • October 15 2010
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That is correct about the UFMIP.  I would not sign anything acknowledging receipt of this GFE and bring up with the lender/broker.  Go above him if necessary
  • October 15 2010
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Profile picture for cvgalloway
Oops - I signed all the paperwork before I knew this information....
  • October 15 2010
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I do not think that gets them off the hook.
  • October 15 2010
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Catherine,
From your other post this just adds to the RESPA violations. If you want relief you may need a real estate attorney to get involved. The potential loss to the mortgage co. is LARGE, so depending on how substantial they are, they may attempt to avoid the liability the RESPA Act imposes for violations.
  • October 15 2010
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Was your initial estimate also delivered on a the 3 Page GFE format?

If so, as mentioned already the lender will be responsible for several cures for tolerance violations.   It doesn't matter if your acknowledged this update GFE.

If your intital GFE was on the proper format, the lender named on that GFE is bound to it and any overages to tolerances should be credited back to you when the closing HUD is reviewed.

  • October 15 2010
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I find it hard to believe that both the broker and the lender overlooked this. Especially, the lender. They're the one that's really on the "hook."
  • October 15 2010
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If the broker issued the GFE and the lender accepted it, true the lender will be on the hook to cure on the HUD, but the broker will be getting zero commission and possibly a nice bill afterwards.

This one looks to be ugly for several people. 
  • October 15 2010
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What happens if the lender never accepted it and only when they decided who to place it with..did the oversighte get caught?

I am not a broker so I don't know how that would play out.
  • October 15 2010
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Andrew,

A lot of lenders will actually perform the GFE for the broker, if they wish. Otherwise, the GFE is scrutinized.

Any defects, the loan file is usually returned by most. Or, the corrections are made by the lender after concurring with the Broker. If all is OK, the lender issues their GFE exactly as what was sent by the broker.

Since May, almost all my loans have been through our Banking Division. Some lenders may have changed. This is what I am aware of prior to May.

Happy funding, Rudi
  • October 15 2010
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You DEFINITELY need to start the process over if you can first of all!  If not then your lender should be responsible for NOT KNOWING what they are doing. It is these type of "professionals" who give our industry a bad name when dealing with the public.
  • October 28 2010
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Profile picture for mymortgagebrokerjoe
they are saying a new gfe is required. your post says "the day before underwriting", but i suspect the compliance department of the lender is rejecting the brokers gfe, and requiring them to redisclose. also, chances are the seller is going to pay for your owners title insurance policy, your contract will specify. what else would you like to know?
  • November 01 2010
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