An Overview of What You Need to Kno...An Overview of What You Need to Know ... the new GFE and HUD...

New GFe & HUD-1 ReqUiRemeNtsAn Overv iew o f Wha t You Need to Know

Purpose of Settlement Statement RevisionsRedesigned and with substantial changes, the new GFE and HUD forms will standardize how fees are dis-closed - making it easier for borrowers to compare offers between lenders. The GFE and HUD-1 will also be aligned to provide even greater transparency for borrowers when comparing settlement charges at closing.

What is Changing?The GFE format is being standardized across the country into a 3 page document in which wholesale Lenders will be bound by the GFE that the Broker provides to the borrower. The GFE can only be re-issued if there is a valid "Charge Circumstance." It does not calculate the cash to close, down payments or POC charges and all charges will now be disclosed in one of 11 "Blocks" that fall into 3 separate categories. Each category has a tolerance limit for fee charges.

When Does the New Form go into Effect?All loans submitted to Guild Mortgage on or after January 1, 2010 will require the new GFE form regardless of whenthe application was taken.

Who Issues the New GFE - the Wholesale Lender or Broker?The broker will issue the initial GFE form directly to the consumer. Any subsequent GFE's will be completed byGuild Mortgage and sent to the consumer with a copy delivered to the broker. Keep in mind the initial GFE mustbe accurate or Guild can choose not to accept the loan transaction. For help on how to fill out the form in accordancewith Guild Mortgage requirements, please contact our office or your local Account Executive.

Timing Requirements for Providing the GFEThe broker cannot issue the borrower a GFE on a pre-approval if they intend to send the loan to Guild Mortgage Com-pany. Additionally borrowers must receive the GFE prior to Originator/Lenders collecting up front fees (except the credit report charge). On real deals (where a property has been selected), the new GFE must be issued as soon as the fol-lowing six items are obtained:

Borrower's Name

Borrower's Monthly Income

Borrower's Social Security Number in order to obtain a credit report

Property Address

Estimate of the Property's Value

Loan Amount being sought

Service Providers ListWhen loans are submitted to Guild Mortgage, a Service Provider's List is required. The broker must list 3rd party settlement services with the initial GFE for any fees identified in blocks 4, 5, and 6. The list must be provided to the borrower, along with the GFE, on a separate sheet of paper at the time of the submission. For information on how to complete this list, please refer to page 3 of this document.

Submitting to Guild MortgageSimilar to the process now, be sure to include the new Good Faith Estimate form with your loan submission (including any reissues), along with your Service Providers List.

For use by Real Estate Professionals only. Not intended for general public use or distribution Real Estate Broker #00201485 – California Department of Real Estate, Unique ID #3274, AZ BR#0018883, MT Entity #001047, NV Broker #1141

9160 Gramercy Dr ive San D iego, CA 92123Ph 858.560.6330 | www.guildmortgagewholesale.com 1

New GFe & HUD-1 ReqUiRemeNtsHow to Complete Page 1 of GFE for Guild Mortgage

The New 3 Page GFE BreakdownPage 1 The new GFE summarizes key loan terms, breaks out escrow information and displays total estimated settlement charges for the loan transaction so the consumer can easily compare loan terms.

Estimates total settlement charges

Page 3 An instructional page designed for borrowers to use as a shopping guide to compare GFE's from other lenders

Important Dates1. The interest rate for this GFE is available through . (If locked type expiration date and if not locked type date & time)

2. This estimate for all other settlement charges is available through . (10 business days from the date of completing the GFE)

3. After you lock your interest rate, you must go to settlement within days to receive the locked interest rate. (Type lock term - i.e. 30, 45 or 60 days and if not locked type N/A)

4. You must lock the interest rate at least days before settlement. (Always type N/A)


9160 Gramercy Dr ive San D iego, CA 92123Ph 858.560.6330 | www.guildmortgagewholesale.com

Summary of Your Loan

This is the total loan amount that will be equal to the loan amount on the note (base + UFMIP when financed)

Loan Term - Amortization period of loan This is the borrower's monthly P&I payment. It must be accurate.

- These items are self explanatory based on the loan program. For questions on adjustable products and the correct margins/caps, please refer to our rate sheet or contact your local Account Executive.

Escrow Account InformationPlease contact your escrow company on the transaction for details on how to complete.

Summary of your Settlement ChargesThese charges are pulled from page 2 and summarized here.

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Your Adjusted Origination ChargesHow to Disclose Origination Fees, YSP and Discount Charges

For completed examples, please click www.guildmortgagewholesale.com

Block 1 "Our Origination Charge" All wholesale lender and mortgage broker charges will now be listed as one, all inclusive origination charge on the GFE in "Block 1" When a YSP is to be paid to the Broker, that dollar amount is added to Block 1

Block 2 "Credit or Charge" for Interest Rate Mortgage Brokers check box 1 to disclose rates at par Mortgage Brokers collecting a YSP, check box two. Brokers must disclose YSP as a credit to the consumer for the interest rate chosen Mortgage Brokers check box three if there is a cost for the interest rate chosen No more than one box can be checked Broker cannot charge discount when YSP is paid

Section AYour Adjusted Origination Charges net Blocks 1 & 2

Your Charges for All Other Settlement ServicesGuild Mortgage recommends that each broker work closely with their local service providers, escrow and title companies for proce-dures on how to accurately reflect their fees.

Blocks 9 – 11 on GFEPlease enter accordingly, (these fees have no tolerance and can change at closing).

Blocks 7 – 8 on GFEPlease contact your escrow and title companies for procedures on how to accurately reflect their fees.

Block 3Guild Mortgage will post on our website a list of services and their fees that should be placed in block 3.

Blocks 4 – 6Contact your service providers, escrow and title companies for procedures on how to accurately reflect their fees as you will be bound to the tolerance requirements on what you disclose. For every fee listed in blocks 4 through 6, a service provider must be identified on the Service Provider List. Guild and the broker are bound by the 10% tolerance limitation to the amount disclosed.

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Service Providers List

Re-Disclosure RestrictionsIf a changed circumstance occurs, only those fees affected by the changed circumstance may change. If the estimates within the GFE are inaccurate, but no change circumstance occurs, the lender is bound to the amounts shown on the last disclosed GFE. If a changed circumstance occurs, the lender must re-disclose after three business days of lender or brokers receipt of the information regarding the changed circumstance. Failure to do so will result in the inability to re-disclose (and change a fee) is lost. Lenders must retain documentation relating to the changed circumstance and fee change, if re-disclosed, for three years.




Trade-off TableComplete Column 1Column 2 & 3 are optional "The loan on this GFE"

Shopping CartComplete Column 1"This loan"

These charges cannot increase at settlement:

g Our origination charge

g Your credit or charge (points) for the specific interest rate chosen (after you lock in your interest rate)

g Your adjusted origination charges (after you lock in your interest rate)

g Transfer taxes

The total of these charges can increase up to 10% at settlement:

g Required services that we select

g Title services and lender’s title insurance (if we select them or you use companies we identify)

g Owner’s title insurance (if you use companies we identify)

g Required services that you can shop for (if you use companies we identify)

g Government recording charges

These charges can change at settlement:

g Required services that you can shop for (if you do not use companies we identify)

g Title services and lender’s title insurance (if you do not use companies we identify)

g Owner’s title insurance (if you do not use companies we identify)

g Initial deposit for your escrow account

g Daily interest charges

g Homeowner’s insurance

Using the tradeoff table

Good Faith Estimate (HUD-GFE) 3

InstructionsThis GFE estimates your settlement charges. At your settlement, you will receive a HUD-1, a form that lists your actual costs. Compare the charges on the HUD-1 with the charges on this GFE. Charges can change if you select your own provider and do not use the companies we identify. (See below for details.)

Understanding which charges can change at settlement

In this GFE, we offered you this loan with a particular interest rate and estimated settlement charges. However:

g If you want to choose this same loan with lower settlement charges, then you will have a higher interest rate.g If you want to choose this same loan with a lower interest rate, then you will have higher settlement charges.

If you would like to choose an available option, you must ask us for a new GFE.

Loan originators have the option to complete this table. Please ask for additional information if the table is not completed.

Your initial loan amount

Your initial interest rate1

Your initial monthly amount owed

Change in the monthly amount owed from this GFE

Change in the amount you will pay at settlement with this interest rate

How much your total estimated settlement charges will be

The loan in this GFE

$

%

$

You will pay $ less every month

Your settlement charges will increase by $

$

$

%

$

You will pay $ more every month

Your settlement charges will be reduced by $

$

The same loan with lower settlement charges

The same loan with a lower interest rate

$

%

$

No change

No change

$

1 For an adjustable rate loan, the comparisons above are for the initial interest rate before adjustments are made.

Use this chart to compare GFEs from different loan originators. Fill in the information by using a different column for each GFE you receive. By comparing loan offers, you can shop for the best loan.

Using the shopping chart

This loan Loan 2 Loan 3 Loan 4

Loan originator name

Initial loan amount

Loan term

Initial interest rate

Initial monthly amount owed

Rate lock period

Can interest rate rise?

Can loan balance rise?

Can monthly amount owed rise?

Prepayment penalty?

Balloon payment?

Total Estimated Settlement Charges

Some lenders may sell your loan after settlement. Any fees lenders receive in the future cannot change the loan you receive or the charges you paid at settlement.

If your loan is sold in the future

These charges cannot increase at settlement:

g Our origination charge

g Your credit or charge (points) for the specific interest rate chosen (after you lock in your interest rate)

g Your adjusted origination charges (after you lock in your interest rate)

g Transfer taxes

The total of these charges can increase up to 10% at settlement:

g Required services that we select

g Title services and lender’s title insurance (if we select them or you use companies we identify)

g Owner’s title insurance (if you use companies we identify)

g Required services that you can shop for (if you use companies we identify)

g Government recording charges

These charges can change at settlement:

g Required services that you can shop for (if you do not use companies we identify)

g Title services and lender’s title insurance (if you do not use companies we identify)

g Owner’s title insurance (if you do not use companies we identify)

g Initial deposit for your escrow account

g Daily interest charges

g Homeowner’s insurance

Using the tradeoff table

Good Faith Estimate (HUD-GFE) 3

InstructionsThis GFE estimates your settlement charges. At your settlement, you will receive a HUD-1, a form that lists your actual costs. Compare the charges on the HUD-1 with the charges on this GFE. Charges can change if you select your own provider and do not use the companies we identify. (See below for details.)

Understanding which charges can change at settlement

In this GFE, we offered you this loan with a particular interest rate and estimated settlement charges. However:

g If you want to choose this same loan with lower settlement charges, then you will have a higher interest rate.g If you want to choose this same loan with a lower interest rate, then you will have higher settlement charges.

If you would like to choose an available option, you must ask us for a new GFE.

Loan originators have the option to complete this table. Please ask for additional information if the table is not completed.

Your initial loan amount

Your initial interest rate1

Your initial monthly amount owed

Change in the monthly amount owed from this GFE

Change in the amount you will pay at settlement with this interest rate

How much your total estimated settlement charges will be

The loan in this GFE

$

%

$

You will pay $ less every month

Your settlement charges will increase by $

$

$

%

$

You will pay $ more every month

Your settlement charges will be reduced by $

$

The same loan with lower settlement charges

The same loan with a lower interest rate

$

%

$

No change

No change

$

1 For an adjustable rate loan, the comparisons above are for the initial interest rate before adjustments are made.

Use this chart to compare GFEs from different loan originators. Fill in the information by using a different column for each GFE you receive. By comparing loan offers, you can shop for the best loan.

Using the shopping chart

This loan Loan 2 Loan 3 Loan 4

Loan originator name

Initial loan amount

Loan term

Initial interest rate

Initial monthly amount owed

Rate lock period

Can interest rate rise?

Can loan balance rise?

Can monthly amount owed rise?

Prepayment penalty?

Balloon payment?

Total Estimated Settlement Charges

Some lenders may sell your loan after settlement. Any fees lenders receive in the future cannot change the loan you receive or the charges you paid at settlement.

If your loan is sold in the future

Changed CircumstanceCircumstances under which a new GFE may be issued Acts of God, disaster, emergency Inaccurate information used to provide the GFE New information not relied on in providing the GFE Other information particular to borrower or transaction (i.e., boundary disputes, environmental problems, etc.) Borrower requested changeChange in GFE terms - limited to the new or changed information

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New GFe & HUD-1 ReqUiRemeNtsHow the GFE Effects the Fee Tolerance

Good Faith Estimate - Fee TolerancesIn an effort to improve the accuracy of the settlement charge information provided to borrowers, new restrictions will be placed on lenders regarding how and when fees disclosed on the GFE may change. Changes to settlement charges between the final GFE and HUD-1 will be defined in three categories.

Zero ToleranceCharges that cannot increase at settlement:

Origination Charges

Discount or Premium Points for a specific rate selected

Adjusted origination charges (after rate is locked)

Transfer taxes

10% ToleranceCharges that cannot increase in the aggregate by more than 10% at settlement:

Required settlement services that the lender selects (appraisal, credit report, mortgage insurance, tax service and flood certificate).

Title services and lender's title insurance (if selected by lender or if the borrower uses a company identified on the Settlement Services Provider list

Owner's title insurance (if the borrower uses a company identified on the Settlement Services Provider list identified

Required settlement services(such as pest inspections) that the borrower selects from the Settlement Services Provider list

Government recording charges

No ToleranceCharges that can increase at settlement:

Required settlement services that the borrower can select, if the borrower selects a service provider not listed on the Settlement Services Provider list

Title services and lender's title insurance (if selected by lender or if the borrower uses a company identified on the Settlement Services Provider list

Owner's title insurance (if the borrower uses a company identified on the Settlement Services Provider list identified

Initial deposit for borrower escrow account

Homeowner's Insurance

Exceeding ToleranceIf charges are at Zero or 10% Tolerance, these fees will not be subject to the tolerances should a changed circumstance occur that directly impacts the fee and a revised GFE is provided within the 3-business-day time period after receipt of the information regarding the changed circumstance.If a violation of the tolerances for charges listed on the GFE occurs, loan originators must cure the violation by reimbursing the borrower for the excess amount of the charge at settlement or within 30 calendar days off settlement. Reimbursement is deemed timely if delivered or mailed within 30 calendar days.


9160 Gramercy Dr ive San D iego, CA 92123Ph 858.560.6330 | www.guildmortgagewholesale.com 5

New GFe & HUD-1 ReqUiRemeNtsGFE & HUD-1 Frequent ly Asked Quest ions



Good Faith Estimate: Lender is bound by GFE > provided to Consumer > by Mortgage BrokerQ: If the mortgage broker purports to permit a borrower to lock in a rate, but the mortgage broker does not lock the rate with the lender, what tolerances apply to origination charges.

A: If the lender accepts the GFE issued by the mortgage broker, the lender is subject to the loan terms and settlement charges. The lender is not required to accept the terms of the GFE the broker issues to the borrower. A zero tolerance applies and the mortgage broker is essential to assure compliance.

Fees to be paid on behalf of the borrower, by the seller, must be disclosed on the GFE.Q: If at the time a GFE is issued it is known that the seller will pay settlement charges typically paid by the borrower, how are the charges disclosed on the GFE?

A: All charges typically paid by the borrower must be disclosed on the GFE regardless of whether the charges will be paid for by the borrower, seller or other party.

A written list of settlement service providers must be provided to the consumer.Q: When do loan originators have to provide the borrower with a written list of identified providers?

A: When a loan originator permits a borrower to shop for third-party settlement services, the loan originator must provide the borrower with a written list of settlement service providers at the time of the GFE, on a separate sheet of paper.

Origination charges and title insurance fees are each disclosed as single, bundled charges.Q: Where should fees such as the loan originator's processing fee, underwriting fee and wire fee be disclosed on the GFE?

A: All origination charges for lenders and mortgage brokers, including fees for administrative and processing services, are included in the charge in Block 1 of the GFE, "Our origination charge," and should not be itemized separately.

Q: Once a GFE is issued are there any circumstances under which the loan terms or charges can change?

A: Yes. The loan terms or charges can change in the event that there are changed circumstances. The definition of “changed circumstances” include the following scenarios:

Acts of God, war or disaster.

Changes or inaccuracies in information relating to the borrower or the transaction that was relied upon in providing the GFE.

Changes to the loan amount or estimated value of the property.

New information regarding the borrower or transaction not relied upon when the initial disclosure was provided.

A lock event (locking the rate or expiration of the lock) or a change in the deal structure requested by the borrower

HUD-1 Settlement Statement If a fee is disclosed on the GFE, but the seller pays it on behalf of the borrower, the fee is still disclosed in the borrower's column on the HUD-1.Q: What if at closing the Seller is paying for a settlement service that was listed on the GFE, such as the Owner's title insurance policy? How is this shown on the HUD-1?

A: If the Seller is paying for a service that was on the GFE, such as Owner's title insurance, the charge remains in the borrower's column on the HUD-1. A credit from the seller to the borrower to offset the charge should be listed on the first page of the HUD-1 in lines 204-209 and lines 506-509 respectively.

For the most current FAQ's go to http://www.hud.gov/utilities/intercept.cfm?/offices/hsg/ramh/res/resparulefaqs.pdfFor additional information regarding the new GFE form and Guild Mortgage's procedures regarding its implementation, please contact your Account Executive or visit our website www.guildmortgagewholesale.com

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An Overview of What You Need to Kno...An Overview of What You Need to Know ... the new GFE and HUD...

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