Loan Applications

RESPA directs that when borrowers apply for a mortgage loan, mortgage brokers and/or lenders must give (at the time of the application or mail within three business days) the borrowers:

  • a Special Information Booklet, which contains consumer information regarding various real estate settlement services; (required for purchase transactions only);
  • a Good Faith Estimate (GFE) of settlement costs, which lists the charges the buyer is likely to pay at settlement; depending on the type of charge and service provider selected, the difference between the estimated costs (GFE) and actual costs at settlement (HUD-1 settlement statement) may be subject to tolerance levels; if tolerance requirements are exceeded, then the borrower may be due a refund from the lender; 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; and
  • a Mortgage Servicing Disclosure Statement, which discloses to the borrower whether the lender intends to service the loan or transfer it to another lender.