A borrower receives their Loan Estimate and calls the MLO confused about why the 'Cash to Close' amount is different from the down payment amount they discussed. The borrower thinks there's an error. What is the MLO's best response?
Correct Answer
A) Explain that Cash to Close includes the down payment plus closing costs and prepaid items
Under TRID regulations, the 'Cash to Close' section on the Loan Estimate includes the down payment plus estimated closing costs, prepaid items, and other fees, minus any credits. This is often different from just the down payment amount. The MLO's responsibility is to educate the borrower about what this figure represents. This is not an error requiring a revised LE, but rather a communication and education opportunity.
Why This Is the Correct Answer
Under TRID regulations, the 'Cash to Close' section on the Loan Estimate includes the down payment plus estimated closing costs, prepaid items, and other fees, minus any credits. This is often different from just the down payment amount. The MLO's responsibility is to educate the borrower about what this figure represents. This is not an error requiring a revised LE, but rather a communication and education opportunity.
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