A processor handoff raises a TRID Changed Circumstances question for a risk reviewer. What answer should guide the file?
Correct Answer
A) Place the fee in the correct tolerance category
Why this is correct: TRID (TILA-RESPA Integrated Disclosure) rules categorize fees into tolerance buckets (e.g., zero, 10%, unlimited). The original explanation states TRID fee disclosures and tolerance categories govern estimates. Placing a fee in the correct tolerance category ensures compliance, as fees cannot be shifted to avoid tolerance cures, and improper categorization can lead to violations. Why the other choices are wrong: "Move the fee to a different category to avoid a tolerance cure" violates TRID by misrepresenting fees to evade cure requirements. "Increase a zero-tolerance charge because the borrower accepted the cost verbally" is non-compliant; zero-tolerance fees cannot increase without a valid changed circumstance and proper disclosure. "Wait until closing to disclose a known lender-required fee" breaks TRID's timing rules, which require timely disclosure. Exam tip: Always assign fees to the correct TRID tolerance category; never shift them to avoid cures.
Why This Is the Correct Answer
The correct response is "Place the fee in the correct tolerance category" because TRID fee disclosures and tolerance categories govern estimates, revisions, and closing-cost comparison.
Why the Other Options Are Wrong
Option B: 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.
Option C: Increase a zero-tolerance charge because the borrower accepted the cost verbally.
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: Wait until closing to disclose a known lender-required fee.
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 Changed Circumstances: 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
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?
Between the Loan Estimate and closing, prepaid interest increases $180, homeowner insurance increases $95, transfer taxes increase $40, and a credit report fee for which the consumer could not shop increases $12. There is no valid revised estimate or other exception. Which increases violate TRID's zero-tolerance 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?
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