A compliance analyst compares the file facts with TILA Loan Estimate Revisions during a new-hire scenario. Which conclusion is accurate?
Correct Answer
B) Use a valid changed circumstance before increasing a fee
Why this is correct: Under TRID (TILA-RESPA Integrated Disclosure) rules, a Loan Estimate's disclosed fees are subject to tolerance categories (zero, 10%, unlimited). A creditor can only increase a fee above the estimated amount if a valid "changed circumstance" as defined by Regulation Z occurs, such as an unforeseen event that increases the cost of a service. The correct choice, "Use a valid changed circumstance before increasing a fee," directly follows this rule. The original explanation correctly anchors this in TRID fee disclosures and tolerance governance. Why the other choices are wrong: "Cure a tolerance problem by renaming the fee instead of documenting or refunding the variance" is wrong because simply renaming a fee does not cure a tolerance violation; the creditor must document a valid reason for the increase or refund the excess to the borrower. "Move the fee to a different category to avoid a tolerance cure" is wrong because fees must be categorized correctly based on the service provided; moving them to circumvent tolerance limits is not permitted. "Increase a zero-tolerance charge because the borrower accepted the cost verbally" is wrong because zero-tolerance charges (like the creditor's own fees) cannot be increased at all for any reason, and borrower verbal acceptance does not override this legal prohibition. Exam tip: Remember the three tolerance buckets: zero (cannot increase), 10% (can increase up to 10% aggregate), and unlimited. A valid changed circumstance is the key that can unlock an increase for fees in the 10% and unlimited categories.
Why This Is the Correct Answer
The correct response is "Use a valid changed circumstance before increasing a fee" because TRID fee disclosures and tolerance categories govern estimates, revisions, and closing-cost comparison.
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 C: 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
TILA Loan Estimate Revisions: 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?
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