Question & Answer

Question: The Good Faith Estimate model form contains space for obtaining the consumer's signature acknowledging that they have received the estimate. Our form doesn't have a signature line and I can't find any such requirement in the regulation. Should I revise my form?

Answer: Good regulation reading! HUD often encourages you to obtain a signature but in fact it is not a requirement of the regulation. The regulation also makes clear that the model form is a model only and not a requirement. Good thing, since the model form was first published more than a decade after the requirement was imposed!

There is further authority for acknowledgement signatures not being required. Paragraph 3500.7(d), which explains the status of the model form, also explains that the lender "may include additional relevant information, such as the name/signature of the applicant..."

Many lenders routinely include acknowledgement signatures as a method of documenting the loan and establishing or proving compliance. Although these additional efforts are commendable, there are other acceptable methods to establish compliance. Clear, written policies and consistent documentation in loan files showing all relevant disclosures and notices is generally sufficient to establish compliance.

Copyright © 1996 Compliance Action. Originally appeared in Compliance Action, Vol. 1, No. 10, 6/96