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
