The applicable Loan Estimate baseline totals $5,500 for recording fees and lender-required services from unaffiliated providers selected from the written list after the borrower was permitted to shop. All listed services were performed, and no revised baseline applies. The same 10% cumulative category totals $6,050 at closing. Is a tolerance refund owed for this category?
Correct Answer
B) No cure; $6,050 is exactly 10% above $5,500, and the bucket allows 10%
B. No tolerance refund is owed for this category. $5,500 × 10% = $550; $5,500 + $550 = $6,050. The actual aggregate equals, rather than exceeds, the permitted ceiling. Scope and exceptions: This is an aggregate test, not a 10% cap on every individual fee. Creditor or affiliate charges have different treatment. Passing this calculation does not establish compliance for other charges or all disclosure duties. Source: Section 1026.19(e)(3)(ii); comments 19(e)(3)(ii)-1 through -6 — https://www.consumerfinance.gov/rules-policy/regulations/1026/19/
Why This Is the Correct Answer
B. No tolerance refund is owed for this category. $5,500 × 10% = $550; $5,500 + $550 = $6,050. The actual aggregate equals, rather than exceeds, the permitted ceiling. Scope and exceptions: This is an aggregate test, not a 10% cap on every individual fee. Creditor or affiliate charges have different treatment. Passing this calculation does not establish compliance for other charges or all disclosure duties.
Why the Other Options Are Wrong
Option A: Yes, a cure of $50, the amount above a 9% cumulative tolerance limit
The applicable cumulative limit is 10%, not 9%.
Option C: No cure; third-party services and recording fees carry no tolerance at all
These assumed charges are not unlimited.
Option D: Yes, a cure of $550, because any increase in these charges must be refunded
It incorrectly applies zero tolerance to this category.
Exam Tip
Verify category membership before calculating the permitted aggregate increase.
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