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
A) 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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An MLO submits a loan application to both DU and LP and receives different recommendations. The DU recommendation is 'Approve/Eligible' while LP gives 'Accept.' What should the MLO do?