FHA May Cap Origination Fees Using the New GFE

The Department of Housing and Urban Development might use the newly implemented good faith estimate disclosure as a way to cap origination fees on Federal Housing Administration loans. All lender origination fees — including yield spread premiums — are captured in 'Block 1' of the GFE. It's unclear what the cap might be, but HUD deputy assistant secretary Vicki Bott, who is in charge of FHA's single-family program, told attendees of a National Association of Mortgage Brokers conference that the issue is on the table. "We are actually looking at capping total Block 1 fees," Ms. Bott told the group. HUD officials are looking at all origination fees charged on FHA loans. It plans to take into consideration loan size so that lenders making $40,000 loans are not penalized. In setting an origination fee limit, "we are not going to be extra conservative," Ms. Bott told the brokers.