A Loan Estimate shows $0 for recording fees because the lender was unsure of the exact amount. At closing, the actual recording fees are $125. The lender argues this isn't a tolerance violation since $0 was disclosed in good faith. Which statement is correct?
Correct Answer
B) This violates the good faith requirement - lenders must research and disclose known fees
The good faith standard requires lenders to use the best information reasonably available when preparing the Loan Estimate. Disclosing $0 for recording fees when such fees are typically charged and the amounts can be reasonably determined violates the good faith requirement under TRID.
Why This Is the Correct Answer
The good faith standard requires lenders to use the best information reasonably available when preparing the Loan Estimate. Disclosing $0 for recording fees when such fees are typically charged and the amounts can be reasonably determined violates the good faith requirement under TRID.
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Previous Question
On a $300,000 loan, the Loan Estimate shows $1,200 in origination charges. At closing, the actual origination charges are $1,150. The lender also charged an unexpected $100 application fee not disclosed on the LE. What is the tolerance violation amount?
Next Question
A borrower's loan receives a 'Caution' message from Loan Prospector (LP) indicating 'Review Income Documentation.' The borrower is self-employed and provided tax returns showing a loss in the most recent year but profits in the previous two years. What is the most appropriate next step?