Is this kosher?

[steve]

Hey all! This is my first post so I hope that am putting my question in the right area. Just some FYI, this site seems really awesome!

Today I was discussing with a broker methods to reduce rate shopping. This broker told me he avoids rate shopping by never sending out GFE or a 1003 until he gets a Borrowers Authorization signed and an appraisal completed.
The broker was explaining to me that this way the borrower has already shelled out a few hundred for an appraisal and will think less about jumping ship after he sees numbers for the first time.

I was wondering if this is a legal method?

[Erik]

Good question. As far as I know, a GFE & TIL are required within 3 days of an application. In my state, that means enough information to pull credit.

That's my understanding anyway but I'm not a legal guru.

[steve]

Thanks for your insight. I really appreciate it!

[johnnyloans]

My first broker that was the process. Take 1003, Get authorization, run credit, order appraisal.

[quidam01]

I think that would be a great idead, the problem i see is that to many websits out there encourage rate shopping.....

[fina]

I dont think its legal.

[mikesmith]

The MDIA requires that every time you pull credit you have to send a GFE/TIL within 3 days. This has always been the rule, just now it is enforcable. If you mail them out, you can not order an appraisal that the client has to pay for "upfront" until 4 days after that.