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?
Correct Answer
D) Charge only a bona fide credit report fee before intent
Why this is correct: Under 12 CFR 1026.19(e)(2)(i), the TILA-RESPA Integrated Disclosure rule strictly limits fees that can be collected before the consumer receives a Loan Estimate and indicates intent to proceed. The only fee allowed is a bona fide and reasonable charge for obtaining the consumer's credit report. Thus, the safest compliant answer 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 is a method for estimating a fee on the Loan Estimate, not a rule about collecting money before intent. "Treat a changed provider fee as unlimited solely because it is paid to a third party" is wrong because a changed provider fee's tolerance category (zero, 10%, or unlimited) depends on specific criteria, not merely that it's paid to a third party. "Resolve the Permitted fees before intent to proceed issue with the asset documentation exception that does not fit the facts" is wrong because applying an irrelevant exception (like one for asset documentation) to a fee-collection rule is incorrect and non-compliant. Exam tip: When you see "before intent to proceed," think: credit report fee only. All other collection is prohibited.
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 B: 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 C: Resolve the Permitted fees before intent to proceed issue with the asset documentation exception that does not fit the facts.
This distractor shifts the issue to a different trigger, product, or timing rule instead of applying the rule tested in the stem.
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
More Origination Questions
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