I have been a mortgage banker for 18 years. The new GFE is not a joke. Line item fees to the lender have a tolerance of 0.00% and other closing costs paid to others such as the appraiser, attorney, title insurance, recording etc have a tolerance of 10.00%. If the actual closing costs exceed the stated tolerances the customer recieves a lender credit for the difference at closing.
What is accurate about the article is the amount of research, documentation and due diligence that is required of lenders is expensive, but required for loans to be sold and serviced by the secondary market. Those new costs are going to be paid by the consumer. The technology and the labor required are not free. Welcome to hope and change!
“the amount of research, documentation and due diligence that is required of lenders is expensive”
No, it is not. You’re talking to a guy that has created computer systems for the mortgage industry and I understand the process extremely well. The amount of bullshit in the industry is amazing. Everyone has their hand in the pie but few add any value to it. I can buy a $50,000 truck right now within the hour and drive it home, but to buy a $50,000 property that I cannot move takes nearly an act of God and thousands of dollars in “fees”. The ONLY people that add any real value and do any real work are the title companies. The rest simply process unnecessary paperwork and want to be paid a king’s ransom for it.