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Good Faith Estimate (One to Four Residential Units)

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A good faith estimate, referred to as a GFE, must be provided by a mortgage lender or broker in the United States to a customer, as required by the Real Estate Settlement Procedures Act (RESPA).

Good Faith Estimate (One to Four Residential Units)

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MORTGAGE LOAN DISCLOSURE STATEMENT – GOOD FAITH ESTIMATE
NONTRADITIONAL MORTGAGE LOAN PRODUCT (ONE TO FOUR RESIDENTIAL UNITS (RE885)
INFORMATIONAL SHEET
WHEN TO USE THIS FORM
NONTRADITIONAL LOAN PRODUCTS – THIS FORM MUST BE USED WHEN THE LOAN PRODUCT
BEING OFFERED TO THE CONSUMER ALLOWS THE BORROWER TO DEFER REPAYMENT OF
PRINCIPAL OR INTEREST AND IS SECURED BY A 1 TO 4 UNIT RESIDENTIAL PROPERTY WHETHER
OWNER OR NON-OWNER OCCUPIED.
Commissioner’s Regulation 2842 defines a nontraditional loan product as “a loan that allows borrowers to
defer repayment of principal or interest. Such products include, but are not limited to, interest only loans where
the borrower pays no loan principal for a period of time and payment option loans where one or more of the
payment options may result in negative amortization. A “nontraditional loan product” does not include reverse
mortgages or home equity lines of credit (other than simultaneous second lien loans).”
If the loan product is NOT a nontraditional loan product the RE882 or RE883 form may be used.
PROPERTY SECURING THE LOAN – This form is used only when the real property securing the nontraditional
loan is a 1 to 4 unit residential property whether owner or non-owner occupied. When the property securing the loan
is NOT a 1 to 4 unit residential property the RE882 or RE883 may be used.
TIPS ON COMPLETING THIS FORM
Page 1 – Compensation to Broker (Not Paid Out of Loan Proceeds) – This section is completed to disclose any
compensation received by the broker from a lender in the form of a yield/spread premium, service release premium
or any other rebate or compensation.
Page 2 - Section III – If the “Initial Adjustable Rate” box is checked, complete sections IV through XI. If the “Fixed
Rate ” box is checked and the loan has an interest only or negative amortization payment feature skip sections IV
through IX and complete section X and XI as appropriate.
Page 3 – Certification – If any or all of the columns on page 4, section XIX, with the exception of the last column
“Proposed Loan”, in the Typical Mortgage Transactions portion of the form are not completed, the broker MUST
read and complete the Certification on page 3.
Page 4 - Section XIX – Comparison of Sample Mortgage Features (One to Four Residential Units) – Use the
“Instructional Guide for Nontraditional Loan Disclosure (Page 4)” found on the DRE Web site at
www/dre.ca.gov/frm_forms.html and go to Mortgage Lending Brokers. If the broker does not offer one or more
comparison loan products, the box “not offered” should be checked for that particular loan product. However, the
broker must provide the required information in all columns except those for which the broker has executed the
CERTIFICATION on page 3 of the RE885.
DO NOT LEAVE ANY LINES OR SPACES BLANK.
After completion, the form must be signed by the broker or broker’s representative and provided to the borrower
within THREE (3) DAYS OF RECEIVING THE BORROWER’S COMPLETED WRITTEN LOAN
APPLICATION.
A COPY OF THE FORM SIGNED BY THE BORROWER MUST BE RETAINED BY THE BROKER FOR A
PERIOD OF THREE (3) YEARS.
Borrower’s Name(s):__________________________________________________________________________________________
Real Property Collateral: The intended security for this proposed loan will be a Deed of Trust on (street address or legal
description) _________________________________________________________________________________________________
This joint Mortgage Loan Disclosure Statement/Good Faith Estimate is being provided by _________________________________ ,
a real estate broker acting as a mortgage broker, pursuant to the Federal Real Estate Settlement Procedures Act (RESPA) if applicable and
similar California law. In a transaction subject to RESPA, a lender will provide you with an additional Good Faith Estimate within three
business days of the receipt of your loan application. You will also be informed of material changes before settlement/close of escrow.
The name of the intended lender to whom your loan application will be delivered is:
 Unknown  ______________________________________________________(Name of lender, if known)
GOOD FAITH ESTIMATE OF CLOSING COSTS
The information provided below reflects estimates of the charges you are likely to incur at the settlement of your loan. The fees, commissions,
costs and expenses listed are estimates; the actual charges may be more or less. Your transaction may not involve a charge for
every item listed and any additional items charged will be listed. The numbers listed beside the estimated items generally correspond to
the numbered lines contained in the HUD‑1 Settlement Statement which you will receive at settlement if this transaction is subject to
RESPA. The HUD‑1 Settlement Statement contains the actual costs for the items paid at settlement. When this transaction is subject to
RESPA, by signing page four of this form you are also acknowledging receipt of the HUD Guide to Settlement Costs.
HUD‑1 Item Paid to Others Paid to Broker
800 Items Payable in Connection with Loan
801 Lender’s Loan Origination Fee $ ________________ $________________
802 Lender’s Loan Discount Fee $ ________________ $________________
803 Appraisal Fee $ ________________ $________________
804 Credit Report $ ________________ $________________
805 Lender’s Inspection Fee $ ________________ $________________
808 Mortgage Broker Commission/Fee $ ________________ $________________
809 Tax Service Fee $ ________________ $________________
810 Processing Fee $ ________________ $________________
811 Underwriting Fee $ ________________ $________________
812 Wire Transfer Fee $ ________________ $________________
_____ ___________________________________ $ ________________ $________________
900 Items Required by Lender to be Paid in Advance
901 Interest for ____ days at $_______ per day $ ________________ $________________
902 Mortgage Insurance Premiums $ ________________ $________________
903 Hazard Insurance Premiums $ ________________ $________________
904 County Property Taxes $ ________________ $________________
905 VA Funding Fee $ ________________ $________________
_____ ___________________________________ $ ________________ $________________
1000 Reserves Deposited with Lender
1001 Hazard Insurance: ____ months at $_______ /mo. $ ________________ $________________
1002 Mortgage Insurance: ____ months at $_______ /mo. $ ________________ $________________
1004 Co. Property Taxes: ____ months at $_______ /mo. $ ________________ $________________
_____ ___________________________________ $ ________________ $________________
1100 Title Charges
1101 Settlement or Closing/Escrow Fee $ ________________ $________________
1105 Document Preparation Fee $ ________________ $________________
1106 Notary Fee $ ________________ $________________
1108 Title Insurance $ ________________ $________________
_____ ___________________________________ $ ________________ $________________
1200 Government Recording and Transfer Charges
1201 Recording Fees $ ________________ $________________
1202 City/County Tax/Stamps $ ________________ $________________
_____ ___________________________________ $ ________________ $________________
1300 Additional Settlement Charges
1302 Pest Inspection $ ________________ $________________
_____ ___________________________________ $ ________________ $________________
Subtotals of Initial Fees, Commissions, Costs and Expenses $ ________________ $________________
Total of Initial Fees, Commissions, Costs and Expenses $ ________________
Compensation to Broker (Not Paid Out of Loan Proceeds):
Mortgage Broker Commission/Fee $ ________________
Any Additional Compensation from Lender  No  Yes $ ________________
(Approximate Yield Spread Premium or Other Rebate)
RE 885 — Page 1 of 4
State of California
Department of real eState
Serving Californians Since 1917
Mortage Loan DiscLosure stateMent/ gooD Faith estiMate
nontraDitionaL Mortgage ProDuct (one to Four resiDentiaL units)
RE 885 (Rev. 8/08)
ADDITIONAL REQUIRED CALIFORNIA DISCLOSURES
I. Proposed Loan Amount: $________________
Initial Commissions, Fees, Costs and
Expenses Summarized on Page 1: $ ______________
Payment of Other Obligations (List):
Credit Life and/or Disability Insurance (see XIV below) $ ______________
__________________________________________ $ ______________
__________________________________________ $ ______________
Subtotal of All Deductions: $________________
Estimated Cash at Closing  To You  That you must pay $________________
II. Proposed Loan Term: __________  Years  Months
III. Proposed Interest Rate: ________%  Fixed Rate  Initial Adjustable Rate
If the Fixed Rate Box is checked in Section III immediately above, proceed to section X. Do not complete sections IV
through IX.
IV Initial Adjustable Rate in effect for ________Months
V. Fully Indexed Interest Rate ________%
VI. Maximum Interest Rate ________%
VII. Proposed Initial (Minimum) Loan Payment $________ Monthly
VIII. Interest Rate can Increase ________% each ________Months
IX. Payment Options end after ________ Months or ________% of Original Balance, whichever comes first
X. After ________ months you will not have the option to make minimum or interest only payments and negative amortization
(increases in your principal balance), if any, will no longer be allowed. Assuming you have made minimum payments, you
may then have to make principal and interest payments of $________ at the maximum interest rate in effect for the remaining
________ months of the loan. These payments will be significantly higher than the minimum or interest only payments.
XI. If your loan contains negative amortization, at the time no additional negative amortization will accrue, your loan balance will
be $________ assuming minimum payments are made.
XII. The loan is subject to a balloon payment:  No  Yes. If Yes, the following paragraph applies and a final balloon payment
of $__________ will be due on ___/___/___ [estimated date (month/day/year)].
NOTICE TO BORROwER: IF YOU DO NOT HAVE THE FUNDS TO PAY THE BALLOON PAYMENT wHEN IT
COMES DUE, YOU MAY HAVE TO OBTAIN A NEw LOAN AGAINST YOUR PROPERTY TO MAkE THE BALLOON
PAYMENT. IN THAT CASE, YOU MAY AGAIN HAVE TO PAY COMMISSIONS, FEES, AND EXPENSES
FOR THEARRANGING OFTHE NEw LOAN. INADDITION, IFYOUARE UNABLE TO MAkE THE MONTHLY
PAYMENTS OR THE BALLOON PAYMENT, YOU MAY LOSE THE PROPERTY AND ALL OF YOUR EQUITY
THROUGH FORECLOSURE. kEEPTHIS IN MIND IN DECIDING UPON THEAMOUNTAND TERMS OF THIS
LOAN.
XIII. Prepayments: The proposed loan has the following prepayment provisions:
 No prepayment penalty (you will not be charged a penalty to pay off or refinance the loan before maturity)
 You will have to pay a prepayment penalty if the loan is paid off or refinanced in the first ______ years. The prepayment
penalty could be as much as $___________. Any prepayment of principal in excess of 20% of the
 original loan balance or
 unpaid balance
for the first _______ years will include a penalty not to exceed ______ months interest at the note interest rate but not more
than the interest you would be charged if the loan were paid to maturity.
 Other – you will have to pay a prepayment penalty if the loan is paid off or refinanced in the first _____ years as follows:
____________________________________________________________________________________________________
____________________________________________________________________________________________________
XIV. Taxes and Insurance:
 There will be an impound (escrow) account which will collect approximately $_______ a month in addition to your
principal and interest payments for the payment of  county property taxes*  hazard insurance  mortgage insurance
 flood insurance  other.
 If there is no impound (escrow) account you will have to plan for the payment of  county property taxes*  hazard
insurance  mortgage insurance  flood insurance  other____________
of approximately $________ per year.
* In a purchase transaction, county property taxes are calculated based on the sales price of the property and may
require the payment of an additional (supplemental) tax bill from the county tax authority by your lender (if escrowed)
or you ifnot escrowed.
RE 885 — Page 2 of 4
RE 885 — Page 3 of 4
Intentionally Blank
XV. Credit Life and/or Disability Insurance: The purchase of credit life and/or disability insurance by a borrower is NOT required
as a condition of making this proposed loan.
XVI. Other Liens: Are there liens currently on this property for which the borrower is obligated?  No  Yes
If Yes, describe below:
Lienholder’s Name Amount Owing Priority
____________________________________________________________________________________________________
____________________________________________________________________________________________________
____________________________________________________________________________________________________
Liens that will remain or are anticipated on this property after the proposed loan for which you are applying is made or arranged
(including the proposed loan for which you are applying):
Lienholder’s Name Amount Owing Priority
____________________________________________________________________________________________________
____________________________________________________________________________________________________
____________________________________________________________________________________________________
NOTICE TO BORROWER: Be sure that you state the amount of all liens as accurately as possible. If you contract with the
broker to arrange this loan, but it cannot be arranged because you did not state these liens correctly, you may be liable to pay
commissions, costs, fees, and expenses even though you do not obtain the loan.
XVII. Article 7 Compliance: If this proposed loan is secured by a first deed of trust in a principal amount of less than $30,000 or
secured by a junior lien in a principal amount of less than $20,000, the undersigned broker certifies that the loan will be made
in compliance with Article 7 of Chapter 3 of the Real Estate Law.
A. This loan  may  will  will not be made wholly or in part from broker controlled funds as defined in Section 10241(j)
of the Business and Professions Code.
B. If the broker indicates in the above statement that the loan “may” be made out of broker‑controlled funds, the broker must
inform the borrower prior to the close of escrow if the funds to be received by the borrower are in fact broker‑controlled
funds.
XVIII. This loan is based on limited or no documentation of your income and/or assets and may have a higher interest rate, or more
points or fees than other products requiring documentation:  No  Yes
NOTICE TO BROkER
If any of the columns in section XIX, Comparison of Sample Mortgage Features, on page 4 of this RE 885 form, are not
completed, you must certify to the following:
CERTIFICATION
I, ________________________________________, hereby certify (or declare) that the failure to complete the information in
any or all of the columns (with the exception of the last column "Proposed Loan" in the Typical Mortgage Transactions portion
of this RE 885) is either because (1) after a diligent search, I have determined that the product specified in that column is not
available to consumers from mortgage lenders, or (2) the borrower to whom this form applies does not qualify for that particular
product.
I certify (or declare) under penalty of perjury under the laws of the State of California that the foregoing is true and correct.
Signature of Broker Date
* "Not offered" indicates the broker does not offer the comparison loan product.
The information provided for the products not offered was obtained from sources deemed reliable. Yes No
** This illustrates an interest rate and payments that are fixed for the life of the loan.
*** This illustrates payments that are fixed after the first five years of the loan at a higher amount because they include both
principal and interest.
**** This illustrates minimum monthly payments that are based on an interest rate that is in effect during the first month only.
The payments required during the first year will not be sufficient to cover all of the interest that is due when the rate increases
in the second month of the loan. Any unpaid interest amount will be added to the loan balance. Minimum payments
for years 2‑5 are based on the higher interest rate in effect at the time, subject to any contract limits on payment increases.
Minimum payments will be recast (recalculated) after 5 years, or when the loan balance reaches a certain limit, to cover
both principal and interest at the applicable rate.
IMPORTANT NOTE: Please use this chart to discuss possible loans with your broker or lender
If a mortgage loan broker licensed by the California Department of Real Estate is acting as your agent in connection
with your home loan/mortgage, the agent owes you certain fiduciary duties, and California statutory law imposes
other duties.
XX. NOTICE TO BORROWER: THIS IS NOT A LOAN COMMITMENT. Do not sign this statement until you have read and understood
all of the information in it. All parts of this form must be completed before you sign. Borrower hereby acknowledges
the receipt of a copy of this statement.
_______________________________________________ ________________________________________________
Name of Broker License # Broker’s Representative License #
_______________________________________________
Broker’s Address
_______________________________________________ ________________________________________________
Signature of Broker Date OR Signature of Representative Date
_________________________________________ ________________________________________________
Borrower Date Borrower Date
XIX. Comparison of Sample Mortgage Features (One to Four Residential Units)
TYPICAL MORTGAGE TRANSACTIONS
Department of Real Estate license information telephone number: (916) 227-0931, or check license status at www.dre.ca.gov
RE 885 — Page 4 of 4
Principal and
Interest
Fully Amortizing
Not Offered*
Interest Only
Fully Amortizing
Not Offered*
5/1 ARM
Fully Amortizing
Not Offered*
Interest Only
Fully Amortizing
Not Offered*
Option Payment
Fully Amortizing
Not Offered*
Proposed Loan
Type of Loan:
Type of
Amortization:
PROPOSED
LOAN AMOUNT
$
‑YEAR TERM
Fixed Rate
( %)
Fixed Rate
( %)
Interest Only for
First 5 Years
Fixed Rate for
First 5 Years;
Adjustable Each
Year After First
5 Years
(Initial rate for 1
to 5 is %;
Maximum Rate
is %)
Interest Only
and Fixed Rate
for First 5 years;
Adjustable Rate
Each Year After
First 5 Years
(Initial rate for 1
to 5 is %;
Maximum Rate
is %)
Adjustable Rate
for Entire Term
of the Mortgage
(Rate in month
1 is %;
Rate in month 2
through year 5 is
%;
Maximum Rate
is %)
Explanation of
Type of Proposed
Loan Product:
Payment Scenarios
Minimum Monthly
Payment Years 1‑5
except as noted $ ** $ $ $
$ ****
(1st year only) $
Monthly Payment in
Year 6 with no change
in rates $ $ *** $ $ $ $
Monthly Payment in
Year 6 with a 2% rise
in rates $ $ $ $ $ $
Minimum Monthly
Payment $ $ $ $ $ $
Your Gross Income $ $ $ $ $ $
Difference $ $ $ $ $ $
Maximum Monthly
Payment in Year 6 with
a 5% rise in rates $ $ $ $ $ $
Your Gross Income $ $ $ $ $ $
Difference $ $ $ $ $ $
Loan Balance Scenarios
How much will be
owed after 5 years? $ $ $ $ $ $
Has the loan balance
been reduced after 5
years of payments?
Yes No Yes No No No/Yes
The loan balance
was reduced
by $
The loan balance
was not reduced
The loan balance
was reduced
by $
The loan balance
was not reduced
The loan balance
increased
by $
The loan balance:
did not change/
increased/decreased
by $
Proposed loan amount and term.
Current interest rate for fixed rate loan.
Current interest rate for fixed rate loan that is interestonly
for first 5 years.
Current fixed interest rate for first 5 years and
maximum rate based on 5% maximum increase.
Current initial interest rate for month 1; interest rate
for month 2 through year 5 based on current fullyindexed
interest rate; maximum rate based on 5%
maximum increase.
Fixed rate loan payment (see *)
Interest-only payment based on fixed rate for first 5
years.
P&I payment based on fixed rate for first 5 years.
Minimum option payment based on month 1 rate for
first year only(see ***).
P&I payment for remaining term (see **).
P&I payment for remaining term (same as #8).
P&I payment for remaining term.
P&I payment based on increased principal balance for
remaining term.
P&I payment for remaining term based on decreased
principal balance at 2% increase in interest rate.
P&I payment for remaining term based on original
principal balance at 2% increase in interest rate.
P&I payment for remaining term based on increased
principal balance at 2% increase in interest rate.
Borrower’s gross income from loan application.
Subtract minimum monthly payment from gross
income.
P&I payment for remaining term based on reduced
principal balance at maximum interest rate.
P&I payment for remaining term based on original
principal balance at maximum interest rate.
P&I payment for remaining term based on increased
principal balance at maximum interest rate.
Subtract maximum monthly payment from gross
income.
Calculate loan balance after 5 years based on minimum
monthly payments for years 1 through 5.
Calculate the amount the loan balance has increased or
decreased after 5 years.
Insert type of proposed loan product.
Insert applicable information for each scenario.
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State of California
Department of Real Estate
Serving Californians Since 1917
Instructional Guide for Nontraditional Loan Disclosure (Page 4)
(one to four residential units)
Principal and
Interest
Fully Amortizing
Not Offered*
Interest Only
Fully Amortizing
Not Offered*
5/1 ARM
Fully Amortizing
Not Offered*
Interest Only
Fully Amortizing
Not Offered*
Option Payment
Fully Amortizing
Not Offered*
Proposed Loan
Type of Loan:
Type of
Amortization:
PROPOSED
LOAN AMOUNT
$
-YEAR TERM
Fixed Rate
( %)
Fixed Rate
( %)
Interest Only for
First 5 Years
Fixed Rate for
First 5 Years;
Adjustable Each
Year After First
5 Years
(Initial rate for 1
to 5 is %;
Maximum Rate
is %)
Interest Only
and Fixed Rate
for First 5 years;
Adjustable Rate
Each Year After
First 5 Years
(Initial rate for 1
to 5 is %;
Maximum Rate
is %)
Adjustable Rate
for Entire Term
of the Mortgage
(Rate in month
1 is %;
Rate in month 2
through year 5 is
%;
Maximum Rate
is %)
Explanation of
Type of Proposed
Loan Product:
Payment Scenarios
Minimum Monthly
Payment Years 1-5
except as noted $ ** $ $ $
$ ****
(1st year only) $
Monthly Payment in
Year 6 with no change
in rates $ $ *** $ $ $ $
Monthly Payment in
Year 6 with a 2% rise
in rates $ $ $ $ $ $
Minimum Monthly
Payment $ $ $ $ $ $
Your Gross Income $ $ $ $ $ $
Difference $ $ $ $ $ $
Maximum Monthly
Payment in Year 6 with
a 5% rise in rates $ $ $ $ $ $
Your Gross Income $ $ $ $ $ $
Difference $ $ $ $ $ $
Loan Balance Scenarios
How much will be
owed after 5 years? $ $ $ $ $ $
Has the loan balance
been reduced after 5
years of payments?
Yes No Yes No No No/Yes
The loan balance
was reduced
by $
The loan balance
was not reduced
The loan balance
was reduced
by $
The loan balance
was not reduced
The loan balance
increased
by $
The loan balance:
did not change/
increased/decreased
by $
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Rev. (8/08)
* "Not offered" indicates the broker does not offer the comparison loan product. The information provided for the products not offered was obtained
from sources deemed reliable. Yes No
** This illustrates an interest rate and payments that are fixed for the life of the loan.
*** This illustrates payments that are fixed after the first five years of the loan at a higher amount because they include both principal and interest.
**** This illustrates minimum monthly payments that are based on an interest rate that is in effect during the first month only. The
payments required during the first year will not be sufficient to cover all of the interest that is due when the rate increases in the
second month of the loan. Any unpaid interest amount will be added to the loan balance. Minimum payments for years 2-5 are based
on the higher interest rate in effect at the time, subject to any contract limits on payment increases. Minimum payments will be recast
(recalculated) after 5 years, or when the loan balance reaches a certain limit, to cover both principal and interest at the applicable rate.

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