A borrower receives Loan Estimates from three lenders on the same day. Lender A shows $2,800 in origination charges, Lender B shows $1,200, and Lender C shows $3,400. All other terms are similar. What should the MLO advise regarding the comparison?
Correct Answer
B) Compare the total loan costs including all fees, not just origination charges
Under TRID regulations, borrowers should compare the total loan costs, including all fees shown on the Loan Estimate, not just origination charges. Some lenders may show lower origination charges but higher other fees, or vice versa. The APR and total loan costs provide a more accurate comparison basis as required by the Truth in Lending Act.
Why This Is the Correct Answer
Under TRID regulations, borrowers should compare the total loan costs, including all fees shown on the Loan Estimate, not just origination charges. Some lenders may show lower origination charges but higher other fees, or vice versa. The APR and total loan costs provide a more accurate comparison basis as required by the Truth in Lending Act.
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A lender discloses a $200 tax service fee on the Loan Estimate but later discovers the borrower's property requires a more complex tax monitoring service costing $275. The borrower has already expressed intent to proceed. Which approach is correct?
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