Finance
What is the purpose of a 'good faith estimate' (now replaced by the Loan Estimate) under RESPA?
ATo guarantee the exact closing costs the buyer will pay
BTo provide the borrower with an estimate of loan terms and closing costs within 3 business days of loan application✓ Correct
CTo allow the lender to change any fees at any time before closing
DTo replace the closing disclosure at the closing table
Explanation
Under RESPA and the TRID rules (TILA-RESPA Integrated Disclosure), lenders must provide a Loan Estimate within 3 business days of a complete loan application. The Loan Estimate replaced the Good Faith Estimate and discloses estimated loan terms and closing costs.
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