WASHINGTON – The U.S. Department of Housing and Urban Development new mortgage reforms are in place that will help consumers to shop for the lowest cost mortgage and avoid costly and potentially harmful loan offers. HUD will require, for the first time ever, that lenders and mortgage brokers provide consumers with a standard Good Faith Estimate (GFE) that clearly discloses key loan terms and closing costs. HUD estimates its new regulation will save consumers nearly $700 at the closing table.

A good faith estimate must be provided by a mortgage lender or broker in the United States to a customer, as required by the Real Estate Settlement Procedures Act (RESPA). The estimate must include an itemized list of fees and costs associated with your loan and must be provided within three business days of applying for a loan.  These mortgage fees, also called settlement costs or closing costs, cover every expense associated with a home loan, including inspections, title insurance, taxes and other charges.  A good faith estimate is a standard form which is intended to be used to compare different offers (or quotes) from different lenders or brokers.  The new form is designed to be easier to read for the consumer.  To fully understand the new rules you should contact your mortgage loan officer or your real estate agent.