Consumer Testing of the Good Faith Estimate Form (GFE), Summary Report

From 2002–2007, Kleimann Communication Group, Inc. (KCG) conducted six rounds of qualitative testing on various consumer mortgage forms for the U.S. Dept. of Housing and Urban Development. This report summarizes each round of testing. Mortgage disclosure forms included in the testing were the Good Faith Estimate (GFE) form, the Guaranteed Mortgage Package Agreement (GMPA), the Mortgage Package Offer form (MPO). Testing was conducted in several U.S. cities using several hundred demographically diverse consumers. HUD’s main goals in revising and testing these forms included the following: The forms should be used by borrowers as a means of comparison shopping for mortgages; the forms should provide borrowers with a clear understanding of the different settlement fees; the tradeoff between the interest rate and up-front fees should be clearer and more easily understood; borrowers should be able to match the numbers on their GFE or MPO to the HUD-1 statement; the role of the loan originator, whether as lender or broker, should be clear. The report describes the findings from the field research regarding each of the questions above, along with recommendations for improvements in the forms.