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This Elk Grove Mortgage Gal has come to appreciate the new Good Faith Estimate 2010... But it may not be why you think!

My biggest beef with the the new Good Faith Estimate 2010? It's not an all inclusive document Borrowers can use to make a decision! That is what a Good Faith Estimate is supposed to do... right? One document a Borrower can reference to understand what type of loan they are getting... at what rate and payment... and for which terms. It should also show them what their down payment is, how much closing costs will be, how much credit they are getting from the Seller, and how much money they need to bring to the closing table.

Unfortunately the new version of this form has moved in the opposite direction of this goal... But it has benefited our business.

Here are two ways...

1. It forces Clients to look beyond rates and make a decision based on who they think will be honest and get the job done!
Our conversations at our initial meetings are going from clients drilling us about interest rates... to showing them why they need an expert who can help them navigate through this challenging real estate market. If not, they risk loosing their dream Sacramento home or investment property!

This has been our message since we started our Elk Grove Mortgage Business, but now that the there's real estate related news coverage almost every night... Clients are often sold before they ever get to our office.

2. I also love the fact that client's interest rate no longer has anything to do with our commission check! 
Before the Good Faith Estimate 2010, we would mark up the interest rate and make what is called rebate. Now we make an upfront flat fee that has nothing to do with the Client's interest rate. Clients can choose to take the wholesale interest rate or mark up the interest rate in order to benefit from the rebate to pay for some of their closing costs.

I should mention, the paragraph above applies just to Mortgage Brokers. Mortgage Banks don't have to tell the Consumer if they are marking up the rate and earning rebate. 

Some Clients don't take our advice when we tell them it's time to lock in their interest rate. They risk a change in their monthly mortgage payment and/or their ability to qualify for the loan by not locking in their interest rate. 

The great thing is interest rates for Mortgage Brokers is no longer tied to the our paychecks! This means if the client thinks they know more than we do about interest rates and feels like gambling... We don't have to gamble with our paycheck.

Instead of complaining about what is wrong with the Good Faith Estimate 2010 form... I am trying to focus on what is good about this new change!

If you would like to schedule an interview with us, please call us at (916) 687-6868 to schedule an appointment!