A borrower's Loan Estimate shows a $400 flood determination fee in the 'Services Borrower Cannot Shop For' section. At closing, the actual fee is $425. The lender did not shop for this service. What is the result?
Correct Answer
B) $25 tolerance violation - this is a 10% tolerance category fee
Fees for services the borrower cannot shop for fall under the 10% cumulative tolerance category. The $25 increase would count toward the 10% tolerance threshold calculation based on the total loan amount, not as a zero tolerance violation.
Why This Is the Correct Answer
Fees for services the borrower cannot shop for fall under the 10% cumulative tolerance category. The $25 increase would count toward the 10% tolerance threshold calculation based on the total loan amount, not as a zero tolerance violation.
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Previous Question
A borrower provides a verbal income estimate of $80,000 annually during a pre-qualification call. The MLO later discovers through employment verification that the borrower's actual income is $65,000. What is the most appropriate next step?
Next Question
An MLO provides a borrower with a pre-qualification estimate without running credit or verifying income. Three months later, the borrower applies for a loan and is denied due to recent credit issues. The borrower claims the MLO misled them. What is the MLO's best defense?