Imagine you are teaching a class on mortgage lending. You are well qualified to do so, and experienced.

You inadvertently omit a section dealing with grapefruit, that is required by the federal government, for reasons that are unclear, but at any rate have no effect on the subject matter.

An alert, if overly conscientous student, reviews her notes, and reports the omission to whomever regulates what you do. As a consequence you are required to rebate all of the fees generated from that class to the Grapefruit Association. Your offer to personally contact every attendee, and review the grapefruit section, is denied.

How do you feel when that day’s revenue disappears, along with all your expenses that you were required to spend to generate that revenue, and sent to an unaffected party?

Notlikingit is right. It is unfair. However, I do remember this issue from training, just haven’t had the chance to put it into practice.

Notlikiing it, isn’t it the lender’s (not the broker’s or the LO’s) responsibility to ensure that the new GFE is correct? That is what I have been experiencing with my first GFE of the year.

This was so simple to fix. And they botched it. They ignored the comments and suggestions. And they harmed the very people they intended to help.

It was so badly done, one is left to wonder if it was intentionally misdesigned.

Steve, I liked your comments. Let us know what you find out about the Excise tax.

Yes we have had much time to get ready for the new disclosure, however why would we need to diclosure a cost that is a sellers cost ALWAYS… and always has been. How does that make sense? And where does HUD tell us that?

I have never been off by more than a few bucks (usually my estimates are higher than actual) for 20+ years. If I didn’t disclose a fee that the buyer/borrower is going to pay, I understand a penalty, but one that is not a borrower fee? and the borrower won’t pay it? This not a “seller to pay for the buyer” fee, this is a customary seller fee.

As far as the HUD 1, you give an untrained LO a form, they’re not going to fill it out correctly – isn’t that the same thing as giving out a NEW GFE form. The only difference is, a HUD 1 IS the standard and IS what we need to compare it to.

If it was that simple HUD would find a reason to change it as they have.

Dear Jillayne,

That is a weak excuse! An untrained Loan Officer/Predatory lender? First off, if your still in the business your not an untrained Loan Officer. Secondly, the Predatory lender as they are called have long since moved on to easier pickings like loan modification specialist, and credit repair specialist, or save your home from foreclosure specialist.

lastly I have a question that wasn’t covered in your excellent class in December on how to fill out these abomination’s that have been force fed to us by H.U.D, even though members of Congress asked them not to impose these ghastly things on the industry. My question is on Federal Excise Tax. Do we disclose it in Washington State? I have read adamant arguments for and against.

No sympathy here. Mortgage industry people have had a year to get ready for this new GFE. I like the idea of having the lender make you cover the cost. The only thing our industry responds to is monetary penalties.

Ardell, yes, it’s true the old GFE was ’suppose to’ match the HUD I, however, what became evident during the predatory lending days which gave way to the financial crisis is that if you give an untrained LO a form, they’re not going to fill it out correctly which means trying to compare it to the HUD is a joke.

I am a 28 year veteran of Mortgage Brokering and Banking and I am floored. Reading this form and taking classes or “webinars” are one thing, but doing the form is another. We really thought we “got it”.

Well in Southern California, buyers don’t pay documentay tax stamps or do the pay Owners Title Policy. Both of this are typically paid by the seller on a purchase. We didn’t show it, so we were told we had to pay it. SOOOOO we fork it over, but the seller pays it? So whaaaat? the seller gains??? Whaaaaa?

We should be using a HUD 1 to disclose as our GFE. Add some stuff to that form about type of loan, PPP, etc, but at least everyone knows who is paying what, who is making what and they CAN actually compare it at the close.

Just wait until you actually USE the form! Not liking it!