TRID Tolerance Rules Test and Answers

TRID TEST

What fees can change 

Tolerances

TRID, or the TILA-RESPA Integrated Disclosure rule, aims to simplify and standardize mortgage disclosures for consumers. It also includes tolerance rules, which allow for some flexibility in the disclosed amounts compared to the final charges. Here are some examples of TRID tolerance rules:

10% Tolerance: This applies to most origination charges (Section A), services you did not shop for (Section B), and prepaids (Section F). It means the final charges can be up to 10% higher or lower than what was disclosed on the Loan Estimate. For example, if the Loan Estimate showed a $500 origination fee, the actual fee could be between $450 and $550.

Zero Tolerance: This applies to certain fees, such as government recording fees, taxes, and title insurance. These must be disclosed accurately on the Loan Estimate and Closing Disclosure.

Unlimited Tolerance: This applies to services you did shop for (Section C). This means there is no limit on how much the final charges can differ from the Loan Estimate, as long as you received a good faith estimate from multiple providers.

APR Tolerance: The disclosed APR on the Loan Estimate is considered accurate if it falls within a certain tolerance of the actual APR. This tolerance depends on the loan amount and whether the finance charge is overstated or understated.

Aggregate Tolerance: This applies to all fees in Section A, B, and F. Even if individual fees fall within their respective tolerances, the total of these fees cannot be more than 10% higher than the total disclosed on the Loan Estimate.

Timing Tolerance: The Closing Disclosure must be provided to the borrower at least three business days before closing. However, a corrected Closing Disclosure can be provided later if the changes are within certain tolerances, such as minor fee adjustments or interest rate changes due to market fluctuations.

These are just some examples, and the specific tolerances may vary depending on the type of fee and loan. It's always best to consult with a mortgage professional to understand how TRID tolerances apply to your specific situation.

 

What constitutes a loan application?

• Name
• Income
• Social Security Number
• Property Address
• Estimated Value of Property
• Mortgage Loan Amount sought

Any amount in the charges that cannot change (zero variation) charged beyond the amount disclosed on the LE will be charged to the consumer.

Select one:

True

False

 

The appraisal fee is what percent tolerance item?

Select one:

a. 0%

b. 5%

c. 3%

d. 10%What date does TRID become effective for applications?

Select one:

a. October 03, 2016

b. October 03, 2015

c. October 13, 2015

d. October 23, 2015

 

What does the Loan Estimate (LE) replace? (select all that apply):

Select one or more:

a. TIL

b. GFE

c. Cash to Close

d. HUD-1

 

The consumer must receive the Closing Disclosure (CD) no later than 3 business days before consummation of the loan.

Select one:

True

False

 

Which of the following charges can change without any tolerance limit (select all that apply)?

Select one or more:

a. Transfer taxes that are paid by the consumer

b. Homeowners Insurance

c. Prepaid interest

d. Amounts placed in Escrow/Impounds/Reserve

Applications taken prior to October 3, 2015 must continue to use TIL
Disclosure, GFE and HUD-1 settlement statement.

Select one:

True

False

 

The consumer has the right to request a revised Closing Disclosure (CD) one business day before consummation.

Select one:

True

False

Select the correct meaning for the acronym TRID.

Select one:

a. TRID-RESPA Integrated Disclosure

b. TILA-RESPA Integrated Document

c. TILA-RESPA Invoice Disclosure

d. TILA-RESPA Integrated Disclosure

What is the consummation date?

Select one:

a. The recording date

b. The disclosure date

c. The signing date

d. October 3, 2015

The Loan Estimate (LE) and the Closing Disclosure can be issued on the same day.

Select one:

True

False

 

 

 

 

•RED is Zero tolerance

Application Fee

•

Appraisal Waiver fee

•

Assumption Fee

•

Broker compensation

•

Commitment Fee

•

Doc Prep fee - for lender (note, mortgage)

•

Du Underwriting Fee

•

Escrow waiver fee

•

Lenders inspection Fee

•

Loan handling fee

•

Loan level price adjustments

•

Mortgage Broker Fee

•

Origination fee

•

Overnight, wire, courier

•

Paid by borrower

•

Points

•

Processing fee

•

Rate Lock Extension

•

Rate Lock Fee

•

Tax Transcript fee (4506T fee)

•

Underwriting Fee

•

Verification of Employment Fee

•

Warehouse Fee

•

Blue no tolerance fee

All other escrow deposits

•

Escrow deposit – homeowners ins

•

Escrow deposit – flood insurance

•

Escrow deposit – MIP/PMI

•

Escrow deposit – taxes

 

•

Blue no tolerance limit

Commission - Real Estate

•

Credit Life & Disability Insurance

•

Debt cancellation coverage

•

Debt suspension coverage

•

Homeowners Association and Condominium fees associated with transfer of ownership (optional)

•

Inspection fees not required by lender but paid for by borrower under real estate contract

•

Payments to Seller for purchasing personal property under RE sales contract

•

Title Insurance - Owner (optional)

•

Warranties for home appliances and systems (optional)

•

Appraisal Fee

•

Appraisal Management Company Fee

•

Attorney Fees –lender

•

Credit Report Fee

•

Flood Determination

•

Flood Monitoring Fee

•

Homeowners Association Certification fee

•

MERS Registration fee

•

Notary fees

•

RD guaranty fee

•

Subordination fee

•

Survey (required and selected by Lender)

•

Tax Monitoring Fee

•

Tax Status Research Fee

•

Termite inspection (lender selects)

•

Title - closing protection letter fee Upfront FHA MIP

•

Title Review fee

•

Transaction fee

•

USDA guarantee fee

•

VA Funding Fee

•

GREEN 10% Tolerance

Inspection Fee

•

Settlement or Closing Fee

•

Survey (Required by lender, borrower selects)

•

Termite inspection fee (borrower shops)

•

Title - underwriter portion of fee

•

Title Agents Portion of Title Insurance

•

Title Insurance – Lender

•

Title Search

•

Title services & Lenders title policy

•

Assignment Recording Fee

•

County deed stamps

•

Other recording fees

•

Revenue Stamps paid by Seller

•

Subordination Recording Fee

•

Earthquake Insurance (if required)

•

Earthquake Insurance (optional)

•

Flood Insurance

•

Homeowners Insurance

•

Interest – prepaid

•

LPMI (Lender Paid Mortgage Insurance)

•

Mortgage Insurance Premium (Paid at closing)

•

Real Estate Taxes

•

 

•

Tax Transfer Fee

 

One final type of fee subject to zero tolerance is transfer taxes. In general, transfer taxes are State and local government fees on mortgages that are based on the loan amount or sales price. Note that the name used under State or local law to refer to these amounts is not indicative of whether they are disclosed as transfer taxes or as recording fees and other taxes. With respect to transfer taxes, the Consumer Financial Protection Bureau has commented that those schedules are readily accessible and amounts don’t often fluctuate. Therefore, it is believed that creditors should be able to disclose transfer taxes accurately and not need any tolerance cushion.

 copyright Caroline Gerardo

Organic Rose Demonstration This Weekend Family Fun

Saturday and Sunday October 1st and 2nd 2016

Orange County Fairgrounds

 88 Fair Dr, Costa Mesa, CA 92626

Orange County California Family FUN

10:00 - 7:00 PM

I am doing demonstrations of organic rose growing

Saturday at 2:00 and Sunday at 3:00

HOW TO Clone or propagate roses organically

Additional tips and tricks on growing roses without chemicals.

Live demonstration 

Children can participate if they can use sharp cutters.

Go home with your own tiny green house cutting

Gift funds

Dinner Bell Winner Winner Chicken Dinner

When will they be wiring the funds? This cannot happen the day of closing.

Does not permit gifts to be given the day of closing.  All gifts and the respective required documentation to be received prior to closing.

Below are gift guidelines for FHA and conventional.

FHA

(3) Required Documentation The Mortgagee must obtain a gift letter signed and dated by the donor and Borrower that includes the following:

·         the donor’s name, address, and telephone number;

·         the donor’s relationship to the Borrower;

·         the dollar amount of the gift; and

·         a statement that no repayment is required.

Documenting the Transfer of Gifts

The Mortgagee must verify and document the transfer of gift funds from the donor to the Borrower in accordance with the requirements below.

·         a. If the gift funds have been verified in the Borrower’s account, obtain the donor’s bank statement showing the withdrawal and evidence of the deposit into the Borrower’s account.

b. If the gift funds are not verified in the Borrower’s account, obtain the certified check or money order or cashier’s check or wire transfer or other official check, and a bank statement showing the withdrawal from the donor’s account.

If the gift funds are paid directly to the settlement agent, the Mortgagee must verify that the settlement agent received the funds from the donor for the amount of the gift, and that the funds were from an acceptable source.

If the gift funds are being borrowed by the donor and documentation from the bank or other savings account is not available, the Mortgagee must have the donor provide written evidence that the funds were borrowed from an acceptable source, not from a party to the transaction.

The Mortgagee and its Affiliates are prohibited from providing the loan of gift funds to the donor unless the terms of the loan are equivalent to those available to the general public.

Regardless of when gift funds are made available to a Borrower, the Mortgagee must be able to make a reasonable determination that the gift funds were not provided by an unacceptable source.

(4) Standards for Gifts of Equity

(a) Who May Provide Gifts of Equity Only Family Members may provide equity credit as a gift on Property being sold to other Family Members.

(b) Required Documentation The Mortgagee must obtain a gift letter signed and dated by the donor and Borrower that includes the following:

·         the donor’s name, address, and telephone number;

·         the donor’s relationship to the Borrower;

·         the dollar amount of the gift; and

·         a statement that no repayment is required.

​

don't get caught at the last days without trail on gift funds here small catch

sunset at Morro Rock

Uncle Theo gave be a big cash gift

The money came into my account from Heaven

Conventional:

Gift letters 
required for all conventional agency loan programs. In addition, "donor ability" must be verified: The lender must verify that sufficient funds to cover the gift are either in the donor’s account or have been transferred to the borrower’s account. Acceptable documentation includes the following:
- a copy of the donor’s check and the borrower’s deposit slip,
- a copy of the donor’s withdrawal slip and the borrower’s deposit slip,
- a copy of the donor’s check to the closing agent, or
- a settlement statement showing receipt of the donor’s check.
When the funds are not transferred prior to settlement, the lender must document that the donor gave the closing agent the gift funds in the form of a certified check, a cashier’s check, or other official check.  (Note: documentation is the same regardless whether the gift was already on deposit at time of application or not.)

What are the requirements for gift fund’s when the donor wires direct to escrow? Based on FHA and conforming conventional loans is the copy of the wire showing where it came from enough along with gift letter.

Cash is not okay, anything over $500 is a Patriot Act Violation