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Homebuyers Beware: Who’s Ripping You Off Now?—What You Must Know About the New Rules of Mortgage and Credit by Carolyn Warren

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17. The Good Faith Estimate: Tricks and Traps

Comparing Good Faith Estimates (GFEs) can be like judging a contest between a mango, a plum, and a peach. Although most mortgage brokers use a standard one-page GFE form, banks and direct lenders often use their own creative forms. Some of these forms omit essential fees, some hide the interest rate, and some don’t even disclose your monthly payment. Now how are you supposed to make an informed decision based on that confusion?

This perplexity caused the U.S. Department of Housing and Urban Development (HUD) to create a new Good Faith Estimate form to be used by brokers and bankers alike, starting in 2010—that is the proposal at this time.

Let’s look at seven tricks lenders use to fool you into thinking ...

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