Which of the following must be disclosed before settlement occurs?

The GFE, or Good Faith Estimate, is a critical document that lenders must provide to borrowers before settlement, specifically for loans covered under the RESPA (Real Estate Settlement Procedures Act). The GFE outlines the estimated costs of a mortgage, including various fees associated with the loan, and helps borrowers understand their financial obligations before they commit to taking on a mortgage. This requirement ensures that borrowers have the necessary information to make informed decisions about their loan options and associated costs.

In contrast, while a notice of title dispute, the initial escrow statement, and the HUD-1 are also important documents within the real estate transaction process, they do not have the same pre-settlement disclosure requirements as the GFE. The initial escrow statement, for example, is typically provided to the borrower after the settlement has occurred, outlining the funds that are being held in escrow. The HUD-1 provides a detailed accounting of the financial transactions at the closing and is issued at or before settlement. The notice of title dispute, while it may be significant, does not have a specific requirement for disclosure prior to settlement in the same manner as the GFE.

Understanding the timing and purpose of these documents is essential in the mortgage lending process, reinforcing the necessity for transparency and informed consent