Final answer:
The acronym 'GFE' in relation to a HUD-1 form stands for Good Faith Estimate, which detailed estimated costs and fees of a mortgage loan for consumer review.
Step-by-step explanation:
When using a HUD-1 form, the acronym "GFE" stands for Good Faith Estimate. Option 1) Good Faith Estimate is the correct answer.
The Good Faith Estimate was previously used in the real estate industry as part of the home buying process. It provided borrowers with a breakdown of their estimated costs and fees associated with a mortgage loan. This form was designed to facilitate comparison shopping among consumers and ensure that they are able to understand the terms and costs before committing to a mortgage. The use of the GFE was eventually replaced by the Loan Estimate form with the implementation of the TILA-RESPA Integrated Disclosure rule.