OK, I want to give a little background. I considered myself fairly knowlegable about RESPA, but the more I dig, the more I learn. I had three findings recently, that I thought I was sure (and one can be found in a thread I made recently). All of these pertain to excessive variances on the GFE. We bought a mortgage company a few years back and their GFE's have been very diverse. At one time they felt that they did not need to include VA funding fee on their GFE in total fees POC, because the borrower capitilzies it into the loan amount (but that is history).

OK, so now to the current issues. I looked at their GFE and compared the GFE values to the HUD-1 and (like usual) came up with some variances. One is the Hazard Insurance Premium. We were not showing the annual premium on the GFE (even though it is required on the Deed. I reviewed RU2000-24 and it seems obvious that the fee should be included. But they disagree and cited that the borrower elected to pay it at close (instead of outside of close).

Then they had another item called a broker fee. The manager of the department argued that the broker fee was not to a mortgage broker, but instead to a Realtor broker and should not have been put on the GFE. I disagreed. Mainly for two reasons, I thought the loan officer could have determined the fee would be paid and I reviewed the link Dan sent me too found here: http://www.hud.gov/offices/hsg/sfh/res/resp0222.cfm

Unfortunately I realized that this pertained to mortgage brokers and not real estate brokers. (Although they never told me that). I am not even sure what the difference is.

Another, and final issue, comes over a whole house inspection fee. I believe some secondary market loan programs require this. So, if it is a requirement, leaving it off of the GFE seems wrong. However, if the borrower decides what kind of inspection they want, then I think the loan officer should have asked, instead of just assuming and not including it in the GFE.

Here's my take. They are blowing smoke out of their (fill in the blank).


§3500.7: Good Faith Estimate (04/01/97)

(a) Lender to provide. Except as provided in this paragraph (a) or paragraph (f) of this section, the lender shall provide all applicants for a federally related mortgage loan with a good faith estimate of the amount of or range of charges for the specific settlement services the borrower is likely to incur in connection with the settlement. . . . .




It should still be shown on the GFE except if they are paying the current year's premium at closing it would not be shown as POC.

Thanks Dan, as always I appreciate your take. Do you have any opinions on the real estate broker fee, or the whole house inspection fee?

I also spoke with a friend of mine last night, who used to be a real estate lender. He told me that the Real Estate Broker fee was listed on their GFE, because the loan officer should know who they are dealing with to buy the house. And thus, he knew what kind of fees were charged.