Beginning in 2010 the mortgage lending industry received a new Good Faith Estimate (GFE) and HUD-1 Settlement Statement designed to protect borrowers from unscrupulous lenders and mostly mortgage brokers. The idea was to provide more transparency in mortgage lending. Instead it created a lopsided playing field resulting in mortgage brokers being required by law to give all of their yield commission back to the customer and allowing banks and lenders to keep theirs a secret.

Oddly enough the result of forcing the broker to return all of their yield commission to the borrower has turned out to be a blessing in disguise because the broker now handily presents a better offer in many cases. In the end the new GFE does not protect the borrower from banks who “jack the interest rate” to make more premium.