Question:

What say mortgage broker laws?

Answer:

Mortgage broker laws require that the broker provides a full written disclosure to their client within 3 business days. The Good Faith Estimate provided by mortgage brokers will have all loan related costs itemized and explained.

If some of the costs on the GFE are not possible to determine, an estimate needs to be provided in good faith.

The written disclosure should contain the APR, the loan amount, the payment schedule, any prepaid points, etc. A credit report, appraisal, mortgage insurance, title policy and insurance, escrow funds, and other third party fees have to be enclosed in the GFE.

Even though many brokers may choose to charge hidden fees, they are required to inform borrowers within three days prior to closing about any extra charges to appear on the final HUD-1 statement. If such additional fees are going to be charged, the mortgage broker is required by the law to provide written explanation of those extra costs to the borrower.

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