Best and Worst New Mortgage Laws

best and worst 2012 gave us plenty of time to see how the new mortgage laws have played out, both for home buyers and home owners refinancing. Here are my votes for the best and the worst new laws.


It seems the Feds took a tip straight out of my book, Mortgage Rip-Offs and Money Savers, by passing a law that states the lender’s fees cannot increase after they give you a Good Faith Estimate (GFE) and you accept it within ten days. This has eliminated surprise fees from popping up at the time of closing–a common occurrence I warned people about. No more bait-and-switch! No more finding a new $500 fee at closing! This is a law we needed, and it has saved borrowers hundreds of dollars.


It’s hard to pick just one, but the law that says the convoluted 3-page GFE designed by the Feds is a contractually binding document is just plain stupid. And I don’t use that word very often. Since when is an estimate a contract? Because of this law, it is impossible for a loan officer to provide a GFE up front. How could anyone offer a loan contract without verifying credit, income, and assets? This law has forced all lenders to rename the upfront GFE to something different.

The form used most often as a GFE before (a great form that was the favorite of most mortgage brokers and my personal favorite) is now titled “Initial Fees Worksheet.” Banks have their own forms with titles such as “Cost Estimate Worksheet” and “Cost Analysis.”

The result has been nothing but confusion. No benefit, no help, no transparency, only confusion.

Let’s hope 2013 brings more common sense, more savings, and more clarity back into federally-required mortgage documents.

Thank you for reading and recommending my books: Mortgage Rip-offs and Money Savers, and Homebuyers Beware. Thank you to all the good folks who emailed to let me know how much money they saved because of this information. It’s for you that I write!

Happy New Year!

4 thoughts on “Best and Worst New Mortgage Laws

  1. Hello Carolyn! Thank you for providing so much advice and information as always. Just a question about GFEs. Are you saying in your post that when I’m starting to shop around for a lender, I can’t ask for GFEs anymore? When would the GFE come into the process? Would I ask for an “Initial Fees Worksheet” or whatever and then get a formal GFE from the preferred lender or is it just cut out of the process entirely?

    1. You can ask and receive the new 3-page GFE up front, but in order to do so, you’ll have to provide your income and asset documents plus have your credit report pulled. This is because fed. regulations say this GFE is a contractually binding document. How could a lender give someone a contract to lend without seeing their financial situation? The way this law is worded, it forces lenders to give you paperwork with a different title on top if you aren’t ready for your credit report to be pulled.

      The Initial Fees Worksheet is the new title of the old GFE. Some lenders have a different title. The title doesn’t matter, it has all the figures on it that you need. In fact, the new GFE is inferior, because it doesn’t tell you how much cash to close is required. An oversight on the part of the feds who designed the form.

      The new 3-page GFE has proven to be so bad that they are now re-designing it. A committee is trying to come up with a completely new GFE and Truth-in-Lending that will be less confusing. They’ve been working on this for over a year now, which shows you how much they know. If only they had real loan officers designing the form rather than federal employees, it would have been complete long ago. Their projected completion date is 2014.

  2. Hi Carolyn,
    I finished reading your book and I learned so much and feel much more prepared now that I’ll be shopping for a loan. Now that the Initial Fees Worksheet is being used, am I still able to ask for a written guarantee the lender’s fees will not vary by more than 10%? Or is that dependent on pulling my credit report?

    Also, similar to the GFE, does the same law apply they must provide us an Initial Fees Worksheet within 3 days? Or does the 3 days only apply if I give them all my information including SS to pull my credit report?

    Thanks again for all your advice, it’s been eye opening!

    1. Yes, Maria, you can ask for a guarantee that lender fees will not vary by more than 10% on the Initial Fees Worksheet. However, the ethical, honest loan officers won’t change lender fees between the worksheet and the GFE. If your credit is worse than what you’ve told your loan officer, then the price of your loan will change. That would not be the loan officer’s fault, of course. Most worksheets come with a credit contingency statement to cover that possibility.

      Providing the Initial Fees Worksheet is a courtesy the loan officer is providing without seeing your credit or financial documents. The three-day law does not apply; in fact, the loan officer is not required by law to give you this at all. The 3-day law applies to giving you the GFE after you have made full application.

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