One of the biggest complaints consumers have about the loan process is that the good faith estimate (GFE) is so often wrong — and wrong in a big way. Instead of the closing costing less than anticipated, or even the same, it often costs a lot more than what the lender had estimated on the GFE.

For borrowers, this feels unfair and it just makes everyone that much more skeptical about the kind of profit lenders are pocketing. While borrowers have the right to try to hold the lender to the GFE in terms of costs and fees, sometimes there are cost overruns that are legitimate, and sometimes not. It’s hard for consumers to know what’s fair and what’s pure profit., which is one of the nation’s largest publishers of mortgage information, has put up a sample HUD-1 form on its website. You can check it out here HUD-1 forms are supposed to show a buyer and seller, or a borrower in the case of a refinance, where the cash is going in the transaction. It doesn’t track all of the cash (for example, you won’t see how much the lender is being paid by the end lender or investor in the form of the Yield Service Premium) but you’ll see a lot of lines of potential costs for your deal.

Many buyers and sellers never see the HUD-1 form until the day of the closing. You can ask your attorney to fax you a HUD-1 form a day before the closing, when typically all of the information is filled in. If you’re not using an attorney, the title company ought to be able to get it for you. This is your opportunity to check what’s on the HUD-1 and make sure it’s correct.

I’m working on a story now about how much mortgages cost — or should cost. The final number should be on the HUD-1, and it should match the GFE either exactly or closely. If not, you should talk to someone at your state office that regulates mortgage lenders.

Sept. 19, 2006.