Blown Good Faith Estimates

With all the news out there lately I haven’t had much in the way of actual consumer help; which I apologize for.

I received a GFE from a friend who recieved it via PDF from their lender in regard to fees. You can learn a lot about GFEs from something like this. Primarily that they are no better than the paper they are printed on.

Click on the picture for a larger view and my thoughts on it (in red & blue).

Note the following: 1. this is a template GFE that is generated out of Calyx Point – one of the industry standard origination systems. 2. this is completely blank and bogus. there is no way this loan can be done and done at those fees. laughable, or not.

UPDATE: So it has been brought to my attention by some (mortgage brokers) that I have not been overly fair in bashing this GFE with out "properly disclosing" some additional information about the transaction that you would need to be privvy too to properly bash this one.

So here is what else you would need to know before you could safely use this GFE to train your new puppy:

Loan type? If it is a negatively amortizing option arm then there is a strong likelihood that these fees could be covered by the lender. I still believe that the proper way to disclose those fees being paid is to list them and mark them paid outside of closing by the lender, but they may not be there.
Loan provider? If it was a FHA loan you could get 4% on a 1-year loan, but the fees would be much higher.
Transaction type? This is a refinance transaction.

A couple of other key point to consider:

Where I commented on Junk Fee Land I meant to relay the fact that this area of the GFE is a favorite spot of lenders and mortgage brokers to have fees not disclosed that "pop up" at the closing table. The fact that there are not any should key you in to looking for these at the end and be wary that a lender will try to slip a few extra hundred dollars in there when its time to close.
The point of bashing that GFE is that many consumers shop by GFEs alone, without knowing any additonal information – that is a dangerous practice with the likelihood of an unsatisfactory outcome.