For a TRID-covered loan, the valid Loan Estimate baseline for the creditor’s origination fee is $625. The consumer pays $700 at consummation, and no event permits a revised tolerance baseline. What amount must be refunded to cure this fee increase?
Correct Answer
B) Cure the $75: an origination charge sits in the zero tolerance bucket
B. Refund the $75 excess. Compare the amount paid with the valid baseline: $700 − $625 = $75. The creditor’s own origination charge does not receive the aggregate 10% allowance. The stated facts rule out resetting the baseline. Scope and exceptions: The post-consummation cure requires the refund and corrected disclosure within the applicable 60-day period; a displayed increase alone is different from an amount actually paid. Source: 1026.19(e)(3)(i), (iv); (f)(2)(v) — https://www.consumerfinance.gov/rules-policy/regulations/1026/19/
Why This Is the Correct Answer
B. Refund the $75 excess. Compare the amount paid with the valid baseline: $700 − $625 = $75. The creditor’s own origination charge does not receive the aggregate 10% allowance. The stated facts rule out resetting the baseline. Scope and exceptions: The post-consummation cure requires the refund and corrected disclosure within the applicable 60-day period; a displayed increase alone is different from an amount actually paid.
Why the Other Options Are Wrong
Option A: Cure the full $700, because the fee was disclosed at the wrong amount
The $625 properly disclosed portion is not the excess.
Option C: No cure: origination charges may be revised at any time before closing
A later disclosure does not by itself authorize a higher baseline.
Option D: No cure: the increase is under the 10% allowance for this category
This is not a charge in the 10% aggregate category.
Exam Tip
Classify the fee, identify the valid baseline, then calculate the excess.
More Origination Questions
Before the team acts on a servicing handoff check, a closing coordinator must address Asset Verification and Reserves. Which response is most defensible?
An MLO is reviewing procedures for a case where a cost changes after the Closing Disclosure has already been provided. What is the proper handling?
During a post-application update, a quality-control reviewer encounters a Credit Analysis and Evaluation issue. Which response should avoid a shortcut that would misapply the rule?
A construction-to-permanent loan will disburse in 5 draws over 11 months before the permanent phase begins. Which Regulation Z appendix provides a disclosure method for multiple-advance construction transactions?
Before closing, the team discovers that a borrower asks which upfront charge can be collected before intent to proceed. What is the safest compliant answer?
A construction loan agreement allows advances only after documented completion of specified work. A builder requests the next draw, but no completion evidence has been provided. What should occur?
Before releasing the final construction draw, which combination most directly supports project completion and clear collateral?
A construction-to-permanent loan will convert to a substantially higher fully amortizing payment. Which payment is especially important when assessing the borrower's long-term repayment capacity?
A construction-to-permanent note states that conversion requires completion, a certificate of occupancy, and no unresolved liens. Construction is finished, but a mechanic's lien remains. What should happen?
A branch manager asks about a loan file because a processor wants to omit known monthly obligations from underwriting. What should happen?
People Also Study
Federal Mortgage-Related Laws
24% of exam
General Mortgage Knowledge
20% of exam
Ethics, Fraud & Consumer Protection
18% of exam
Uniform State Test Content
11% of exam