A processor handoff raises a TRID Fee Tolerance Levels question for an audit analyst. What answer should guide the file?
Correct Answer
B) Disclose settlement charges within TRID timing rules
Why this is correct: TRID rules (Regulation Z) establish strict timing and accuracy requirements for disclosing settlement charges on the Loan Estimate and Closing Disclosure. The core concept is that fees must be disclosed to the consumer within specific timeframes (e.g., within 3 business days of application for the initial Loan Estimate) and must be based on the best information reasonably available. The rule's purpose is to ensure borrowers receive accurate cost information early enough to shop. The correct answer, "Disclose settlement charges within TRID timing rules," directly addresses this fundamental requirement. Why the other choices are wrong: "Leave the Loan Estimate unchanged after the creditor learns the disclosed charge is inaccurate" is wrong because TRID requires creditors to issue a revised Loan Estimate if they discover before closing that an estimated charge has become inaccurate. "Cure a tolerance problem by renaming the fee instead of documenting or refunding the variance" is wrong because tolerance violations (e.g., fees exceeding the 10% aggregate tolerance) must be cured by a documented refund to the borrower; renaming a fee does not cure the violation. "Move the fee to a different category to avoid a tolerance cure" is wrong because fee categories have specific tolerance levels (0%, 10%, unlimited), and moving a fee to a different category to avoid a refund requirement is a violation. Exam tip: Remember that TRID's tolerance rules are tied to specific fee categories. A fee cannot be re-categorized to avoid a cure obligation.
Why This Is the Correct Answer
The correct response is "Disclose settlement charges within TRID timing rules" because TRID fee disclosures and tolerance categories govern estimates, revisions, and closing-cost comparison.
Why the Other Options Are Wrong
Option A: 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.
Option C: Cure a tolerance problem by renaming the fee instead of documenting or refunding the variance.
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: Move the fee to a different category to avoid a tolerance cure.
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
TRID Fee Tolerance Levels: 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
More Origination Questions
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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?
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Before releasing the final construction draw, which combination most directly supports project completion and clear collateral?
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A branch manager asks about a loan file because a processor wants to omit known monthly obligations from underwriting. What should happen?
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