In a training scenario, a borrower asks which upfront charge can be collected before intent to proceed. What action best follows the rule?
Correct Answer
B) Charge only a bona fide credit report fee before intent
Why this is correct: Regulation Z (the governing federal rule establishes a clear prohibition: a creditor cannot collect any fee from a consumer before the consumer has received a Loan Estimate and indicated intent to proceed, except for one specific type of fee. The permitted fee is a bona fide and reasonable charge for obtaining the consumer's credit report. Therefore, the action that best follows the rule is "Charge only a bona fide credit report fee before intent". Why the other choices are wrong: "Use the lowest advertised provider quote after a different provider has been selected" is wrong because this addresses how to estimate a fee for the Loan Estimate when the consumer chooses a different service provider, not what can be collected upfront. "Treat a changed provider fee as unlimited solely because it is paid to a third party" is wrong because a fee paid to a third-party provider is not automatically unlimited; its tolerance depends on whether it was selected by the lender or consumer. "Leave the Loan Estimate unchanged after the creditor learns the disclosed charge is inaccurate" is wrong because if a creditor learns of a fact making a disclosed charge inaccurate before closing, a revised Loan Estimate may be required; leaving it unchanged could violate good faith disclosure rules. Exam tip: The rule on pre-intent fees is absolute except for the credit report fee. Memorize this as a key TRID limitation.
Why This Is the Correct Answer
The correct response is "Charge only a bona fide credit report fee before intent" because Lines 186-203; 12 CFR 1026.19(e)(2)(i).
Why the Other Options Are Wrong
Option A: Use the lowest advertised provider quote after a different provider has been selected.
This choice is not the best answer because it applies the wrong file step for fee disclosure and tolerance treatment; the governing rule is tested by the correct option.
Option C: Treat a changed provider fee as unlimited solely because it is paid to a third party.
This choice is a tempting shortcut, but it conflicts with fee disclosure and tolerance treatment because the file still needs the required documentation, timing, or rule-based review before the action is taken.
Option D: Leave the Loan Estimate unchanged after the creditor learns the disclosed charge is inaccurate.
This choice is not the best answer because it applies the wrong file step for fee disclosure and tolerance treatment; the governing rule is tested by the correct option.
Memory Technique
Permitted fees before intent to proceed: identify the rule being tested, then choose the action that documents or applies that rule before the file moves forward.
Exam Tip
For fee disclosure and tolerance treatment questions, separate the required file step from plausible sales, timing, or documentation shortcuts.
Common Mistakes to Avoid
- -Choosing an internal exception instead of the governing rule
- -Treating preliminary or informal facts as a substitute for required documentation
- -Answering from a familiar but unrelated mortgage topic
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