While this was designed to comply with the RESPA GFE changes for 2010, which mandate that all origination related costs are put into one box on the GFE — it does open the door for unscrupulous mortgage companies to charge a premium here.
If you are getting a new FHA loan or doing an FHA mortgage refinance, you should only pay 1% in origination fees plus your underwriting, processing, and similar fees. The new GFE will cause all borrowers to have a perceived origination cost much higher than in the past, but the reality is that this just a streamlined way of representing the costs of your new loan on the GFE.
FHA loans are designed to help the borrower. If you are uncomfortable in any way with your estimate, ask questions or better yet, get a 2nd opinion. It won’t cost you anything, and could save you thousands of dollars over the life of your FHA loan.
