A branch manager asks about a loan file because a borrower asks which upfront charge can be collected before intent to proceed. What should happen?
Correct Answer
C) Charge only a bona fide credit report fee before intent
Why this is correct: Under TRID, a lender is generally prohibited from collecting any fees from a consumer before the consumer has received the Loan Estimate and indicated an intent to proceed with the loan. There is one narrow exception: a lender may collect a bona fide and reasonable fee for obtaining a consumer's credit report. The correct action is "Charge only a bona fide credit report fee before intent." Why the other choices are wrong: "Cure a tolerance problem by renaming the fee instead of documenting or refunding the variance" is wrong because renaming a fee to avoid a tolerance cure is deceptive and does not correct the underlying violation, which requires a refund or proper documentation. "Move the fee to a different category to avoid a tolerance cure" is wrong for the same reason; it is an attempt to circumvent TRID's fee tolerance rules rather than comply with them. "Increase a zero-tolerance charge because the borrower accepted the cost verbally" is wrong because zero-tolerance fees (like the loan originator's commission) cannot be increased at all, regardless of borrower verbal agreement. Exam tip: Before the borrower's intent to proceed, the only fee you can collect is for a bona fide credit report. Remember: 'Credit report only.'
Why This Is the Correct Answer
The correct response is "Charge only a bona fide credit report fee before intent". The narrow fee exception is for a bona fide and reasonable credit report fee before Loan Estimate receipt and intent to proceed.
Why the Other Options Are Wrong
Option A: 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 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 D: 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.
Memory Technique
Before intent to proceed, think credit report only.
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
- -A common trap is treating all third-party fees as collectible before intent.
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