A Bad Faith Estimate is the practice of under estimating figures or closing cost by the lender or mortgage broker to make the loan more attractive to the borrower.

Lender and mortgage brokers both know that most borrowers will shop around for the best interest rates and closing cost combination. What ends up happening is that you will be quoted with the lowest 'best case scenario'. There are many fees and expenses that can be misleading or under estimated in a good faith ESTIMATE.

My suggestion, use an mortgage broker who is honest and provides you with an accurate good faith estimate. Sure the numbers might seem a little higher, but it's better to know the truth than being surprised at the end with a bad faith estimate.

If you were provided with a bad fait estimate there are steps you can take;

• Register a complaint with the HUD office and Regulatory affairs (451 7th Street S.W., Washington, DC 20410 Telephone: (202) 708-1112 TTY: (202) 708-1455)
• For national banks, http://www.occ.treas.gov
• For Federally chartered savings and loan associations, http://www.ots.treas.gov
• For state-chartered banks and savings and loans, http://www.lendingprofessional.com
• For mortgage banking firms, http://www.aarmr.org