The Good Faith Estimate (GFE) was the centerpiece of the 2010 RESPA Final Rule. Easy Soft redeveloped Easy HUD after the new rules, and the new version made it easy for users to prepare a GFE and compare it to the HUD. Agents and attorneys who don’t pay attention to the GFE during HUD-1 settlement are going to find themselves in serious trouble down the road. However what if there is a problem with your original estimate? Are you allowed to change it?
Why Revise The GFE?
Even if there is a mistake, should you bother revising the Good Faith Estimate once it’s issued? Well the main reason to consider it is that if there is an error in the GFE and the actual fees are greater than the tolerances for given categories (and some of those tolerances are 0%), then the lender is responsible for those fees.
If the false information causes the estimate to have been high then there is no reason to revise the GFE. The law allows people to charge less than the estimate! If the fees are going to be within the tolerance limits then there is no reason to revise the estimate either, which is nice for fees like homeowner’s insurance. If the overage is going to be small then it might not be worth it to revise the GFE. However for large overages you might be allowed to change the GFE values in Easy HUD real estate settlement software.
Reasons Allowing Revised GFEs
RESPA rules do allow real estate professionals to revise a GFE under certain rare circumstances that include acts of God or acts of war. The latter are pretty much non-existent in this country and even the former, such as unanticipated increases in costs after a natural disaster, are extremely rare. However there is at least one other circumstance that allows a revised GFE: inaccurate information.
Sometimes buyers or, more often, sellers are “creative” in the information they provide. Other times they simply make mistakes. Bad information can also come from any of the many other entities involved in a property sale. When the lender discovers the information provided was inaccurate then they have a change of circumstance that permits them to revise the GFE.
Find out how easy it is to create and change GFE values with Easy HUD, Easy Soft’s HUD preparation software. Try the product for yourself and generate closing documents more quickly, accurately and efficiently.