Blog of the Mortgage

RESPA, GFE2010, Loan Fee Worksheet, Initial Fee Sheet, 2010 itemization and Letter of intent to proceed, it’s all enough to make your head spin.

First I want to point out a number of helpful items I’ve come across in my research on this topic.

1. Calyx Point – Link on How to Complete Initial Fees Worksheet

2. Calyx Point – Link about GFE2010

3. Wells Fargo Completing GFE2010 Scenarios

4. Wells Fargo GFE Job Aid

So, when you are completing all of these forms remember the following:

Calyx Users: We need GFE AND Initial Fees worksheet ONLY (no Loan Fee Worksheet) – Read the link above on how to compete your forms.

Encompass Users: we need GFE2010 AND Loan Fee Worksheet (on FAMC site)

About our Loan Fee Worksheet (Encompass users) specifically Yield Spread Premium (YSP): do not think about this form in terms of GFE2010. Think about this form in terms of GFE2009 (the old way).

If your loan is locked you need to complete this section (YSP). Head down to the line that is for YSP, The first box is the total amount of locked in YSP.

If through your origination charge you are earning (retaining) any YSP you need to include this in Broker retained YSP section. Whatever amount you are NOT retaining (crediting) gets listed in YSP Credited to borrower.

Put another way: If you are looking to earn 2.50% on your transaction AND the loan is LOCKED at 1.45% YSP you would write in:

Origination fee of 1.05% (in dollars)

YSP = 1.45% (in dollars)

Broker retained YSP of 1.45% (in dollars).

If you are charging 2.50% AND are crediting the entire YSP to the borrower then you would write in:

Origination fee of 2.50% (in dollars)

YSP = 1.45% (in dollars)

YSP Credited to the Borrower =1.45% (in dollars)

If your loan is NOT LOCKED: You would NOT complete the YSP section and ONLY list Origination of 2.50%.

Calyx Users and Initial Fees Worksheet: LOCKED LOANS:

If you are looking to earn 2.50% on your transaction AND the loan is LOCKED at 1.45% YSP you would write in:

Line 801 - Origination fee of 1.05% (in dollars)

Line 812 - YSP = 1.45% (in dollars)

In the area below Line 814 - Compensation Paid to Broker from Lender (not paid from applicants loan proceeds) you would include ALL of YSP of 1.45% (in dollars) so that it carries over correctly to GFE2010 Line 2.

Calyx Users with unlocked loans: ALL origination in this example of 2.50% goes into Line 801.

Wait! My damn Initial fees worksheet doesn’t balance! The borrower is showing as coming in with too much cash to close. In this case you will need to head on down to the bottom of your Initial Fees sheet and add a lender credit of however much you would like to balance the sheet correctly. You will also want to add a lender credit on Page 4 of the 1003 in order to get that piece Balanced correctly too.

Calyx Users: Where do all of my Fees go? How to they Transfer Back and Forth between Initial Fees worksheet and GFE2010?

Box 1 – ALL 800 Series Charges

Box 2 – if marked as credit (from above 814)

Box 5 – Do not put owners title on the Initial Fees sheet (when you break it out separately in Box 5 it will carry back to Initial Fees section 1300: Total from GFE2010)

Box 6 - Pest Inspection is auto-populated from 1302 (if input) on Initial fees worksheet.

Box 6 Continued: Any additional itemized amounts listed here will carry back to Initial Fees

section 1300: Total from GFE2010

Box 9 – Adds together ALL of 1000 series charges

Box 10 – generated from Line 901

Box 11 – Generated from Line 903

What’s Up with this Letter of Intent to Proceed?

Here’s a dooozy and this is VERY important. As you all should understand at this point, GFE’s MAY EXPIRE after the 10 business days as posted on your GFE2010 important dates line 2 (GFE2010 Page 1). After the expiration of the GFE and because there is no place for the borrower to sign the new GFE you will eventually need the borrower to commit to (or lock in) your GFE2010. Once the borrower has signed the Letter of Intent to Proceed your GFE is locked in forever. You may not make a single change (other than change of circumstance). So: DO NOT send this in with your submission ONLY send it in when you are ready to order loan docs.

I am hopeful that this was able to clarify SOME of the issues going forward with GFE2010 and where what charges are etc.

Please DO NOT hesitate to call me with any questions.