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If the actual costs come in higher than the signed GFE, is the broker responsible for extra costs?

I just received my GFE on Friday. The broker we are using had us initial each page of it. In addition, he said that the costs are probably a little high, but thats because if the actual closing costs come in higher than the GFE, he is responsible to pay the difference. Is that true? Should we prepare to have more money available or is that the maximum amount of money we are legally responsible for? Thanks in advance.
  • November 20 2011 - US
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Answers (3)

GFEs do not need to be signed, there's not even a place on the GFE to sign. The lender only has to retain documentation that they delivered it to you.

The broker knows his own charges (#1, #2 and block A plus the appraisal and credit report fees) and therefor those charges should not be "high", the should be exact. If you've not locked in then #2 and A will change, #1 will never change unless the origination fee is based on the loan amount in which case it will change if you change your loan amount.

The lender is only on the hook for title charges if you use the title company they first identified as lender selected. (10% tolerance); choose your own and it doesn't matter what's on the GFE.



  • November 20 2011
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  • November 20 2011
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It should be the max amount needed. The GFE is not really a "legal" document, in the same sense as a contract, though. It is a disclosure of estimates. Some of the estimates have a tolerance for movement. Some of them don't. There are repercussions for inadequate, or misleading, disclosure. They don't really apply until you start signing, or start having to refuse to sign, the "legal" documents. The note, and it's underlying "price", is the main legal document that is affected by the disclosures. Improper disclosure could make the note, that you will eventually asked to sign, dubious in it's legality. If you sign the note, in the face of known discrepancies in disclosure of the costs, it may still retain it's standing as 'Legal", while being flawed in ways that could result in remedies for you. Meaning you could get your money back from the erroneous dis-closer, without upsetting the existence of the note, after executing the note.

All of this is my opinion, and not legal advice. I can't give legal advice.
  • November 20 2011
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