FORM 4506 T & GFE - Posted by milestone

Posted by Michael Steele on May 04, 2006 at 09:00:37:


  1. The mortgage broker did fail to disclose such pre-paid expenses. This is true. As a customer the only thing you can do at this point is complain but keep in mind your complaint will not change the deal. You are not in the position to say “they didn’t tell me about it therefore I won’t pay it” it does not work in such a manor. Unfortunatly the lack of info does actually affect your apr rate and push up your closing costs a bit but do keep in mind they are costs you would have had to pay anyway (weather you knew of them or not) Don’t take this as me jumping to the defense of a fellow L.O. but facts are facts.

  2. You should not have to sign an initial 4506 but they are usually put in the final loan documents of a “no doc” deal. The purpose of the 4506 is so that the lender can verify any federal documents that you have provided. With you having a “no doc” deal there is nothing they are given that they can verify but the 4506 form is still a standard form put in most loan packets to be signed at the closing table. It is nothing to be alarmed about. Its just standard procedure.

The purpose of paying more interest is such: A no doc deal is an extremely high risk deal for a lender to take. They are set up to not verify any income information what-so-ever. The lender goes strickly on credit score and other compensating factors without need for “income verifictaion” therefore because of their risk they will hit you with a higher interest rate.

To put it bluntly – you will pay for it one way or another. Either way you get your property financed.

Please contact for more detials

Mike Steele

FORM 4506 T & GFE - Posted by milestone

Posted by milestone on May 04, 2006 at 03:42:22:

Recently I locked in a rate for a no-doc loan and received GFE for the locked-in rate.

However, when I went through the application, I noticed that there was a discrepancy between the locked in GFE and the GFE which came with the loan application:

  1. Hazard insurance: that I made a special point to the loan officer that our HOA pays it through our assessment.
  2. Pre-paid property tax for 6 months: the broker never mentioned it even verbally.

Apparently, he did not include these two upfront expense in the APR.

Question #1 for GFE is: Did the mortgage broker failed to disclose such pre-paid expenses? If so, what can I do as a consumer?

Question #2: Since I applied for a no-doc loan (therefore, higher interest rate), do I have to sign the FROM 4506-T? If so, what is the purpose of paying more in interest?

Thanks a lot in advance,


Re: FORM 4506 T & GFE - Posted by jd

Posted by jd on May 04, 2006 at 10:05:50:

I am sorry man, but I need to vent for 2 seconds. Does this ring any bells???:
The information provided below reflects ESTIMATES of the charges which you are likely to incur at the settlement of your loan. The fees listed are ESTIMATES-actual charges may be more or less. Your transaction may not involve a fee for every item listed. The numbers listed beside the estimates generally correspond to the numbered lines contained in the HUD-1 settlement statement which you will be receiving at settlement. The HUD-1 settlement statement will show you the ACTUAL cost for items paid at settlement.

I understand that you want to be informed in regards to all costs incurred to close your loan, but, these are PRE-PAID items, you are paying them wherever you go!!! If anything changes in the 800 lines, walk!!! That?s all, just have had more then one individual in the last month complain about pre-paid items. Thanks for your time,

Re: FORM 4506 T & GFE - Posted by Shambhu Nath

Posted by Shambhu Nath on May 04, 2006 at 09:54:25:

The prepaids do not affect your closing costs. They are shown to show your cash to close and total settlement costs. Also, the APR is NOT affected by escrow. APR is affected by lender and broker fees, points and lender costs and some title company fees but not your escrow. If it was, then people who choose not to escrow, will see a lower apr, but it is not true as you have to pay those costs wheter you escrow or not.

Usually no doc loan does not require 4506. The stated income loans require 4506 not to verify the income but for audit reasons. If some one states an income and then defaults onthe loan, the lender can check the income for audit purpose. They do not use it to verify income. On full doc income, 4506 is used to validate the tax returns.