Real Estate Insight

Although the Consumer Financial Protection Bureau, the federal agency created to oversee mortgage lending, only recently opened, the Bureau started looking at ways to protect consumers during the loan-shopping period long before it’s official start date.

• The bureau is exploring avenues for combining the two forms that borrowers currently receive – the three-page Good Faith Estimate and the two-page Truth in Lending Act form. These forms tell would-be borrowers the terms of their loan – for instance, how payments on an adjustable-rate mortgage change. They also lay out fees.
  
  
• Fees can make a big difference when comparison shopping. The simplest way to compare loans is by looking at the Annual Percentage Rate, or A.P.R. That calculation rolls in fees as well as the stated interest rate. Because lenders are required to follow the same formula, useful comparisons can be made.
  
  
• Borrowers are advised to request a Good Faith Estimate from every lender they approach. While the Good Faith Estimate is in place to help borrowers, according to one lender, some lenders may provide interest-rate quotations that expire almost instantaneously, making it difficult for buyers to comparison shop.
  
  
• Borrowers should be wary if they receive two or three different Good Faith Estimates and there is a difference of several thousand dollars.