Question

A good faith estimate is required by law to be given by the lender to the borrower within three days of submitting a loan application. What are some of the drawbacks of not having that estimate at the time of closing?

Answer 1

Short answer: not having the required good faith estimate (GFE) or its modern equivalent (the Loan Estimate under TRID) before closing exposes the borrower to surprise costs, loss of important consumer protections, increased risk of errors or misrepresentation, and potential hassle pursuing remedies after the fact. It can also create regulatory liability for the lender.

More detail — the main drawbacks

- Surprise or higher closing costs
- Without an estimate you can’t verify the fees you’re being charged. Items that commonly jump at the last minute: origination/processing fees, title/escrow fees, lender credits removed, prepaids and reserves.
- Inability to shop and compare loans
- The GFE/Loan Estimate is meant to let you compare offers. Without it you lose time and leverage to get a better rate/fee package.
- Loss of time to review and catch errors
- You have less chance to spot mistakes (wrong loan amount, interest rate, points, payment terms) and to get them corrected before signing.
- Erosion of statutory consumer protections
- Under the rules that replaced the GFE (TRID), the lender must give the Loan Estimate within three days of application and a Closing Disclosure at least three business days before consummation. Those timing rules impose tolerances and limits on how much certain charges can change. If proper disclosures aren’t given, you may have remedies — but those are easier to pursue if you haven’t closed.
- Risk of pressured or rushed signing
- Sellers/agents/loan officers may pressure you to close even when disclosures are late; that increases the chance of making a bad decision.
- Possible closing delays, cancellations or contractual problems
- Discovering issues at (or after) closing can delay funding, jeopardize the sale, or create disputes with the seller/escrow agent.
- Need for post‑closing remediation (harder and slower)
- If you close without the estimate and later discover a violation, you’ll have to pursue refunds, lender corrections, regulators, or litigation — which is time-consuming and uncertain.
- Regulatory and reputational risk for the lender (and practical consequences for you)
- A lender who fails to provide required disclosures may face CFPB/state enforcement, fines, or required reimbursements — but those remedies don’t immediately fix your closing-day problems.

What to do if you don’t have the estimate before closing

- Don’t feel obligated to close. You can request the required disclosure and insist on the legal wait period.
- Ask for the Loan Estimate (or GFE if your transaction is governed by older rules), then compare line-by-line to the Closing Disclosure/HUD‑1.
- If the lender won’t provide it or won’t delay closing, consult your real estate agent and a real estate/consumer attorney.
- Document communications and keep copies of every disclosure.
- File a complaint with the Consumer Financial Protection Bureau (CFPB) or your state regulator if you suspect a violation.
- If you already closed, get legal advice quickly about remedies (refunds, corrections, or litigation).

If you want, tell me whether this is a conventional mortgage or another loan and whether you’re before or after closing — I can give more specific steps and language to use with the lender or regulator.