A borrower compares the Loan Estimate with the Closing Disclosure and sees that government recording fees rose from $350 to $400. Under the TRID tolerance rules, is that increase permitted?
Correct Answer
C) Yes, if the 10 percent aggregate category did not rise more than 10 percent overall
TRID sorts estimated closing costs into three tolerance buckets. Charges the creditor imposes, charges from an affiliate, transfer taxes, and services the consumer may not shop for carry zero tolerance. Recording fees, together with services the consumer selects from the creditor's written list, sit in the 10 percent aggregate bucket of 12 CFR 1026.19(e)(3)(ii), so one line may rise by more than 10 percent as long as the bucket total does not. Prepaid interest, property insurance premiums, escrow deposits, and providers the consumer finds off the creditor's list have no limit. The $50 increase is therefore measured against the bucket, not against the $350 estimate alone.
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Related Topics & Key Terms
Key Terms:
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More Property Disclosures Questions
A seller who fails to provide required disclosures may be liable for:
HOA disclosure requirements typically include:
Potential buyers lose interest in a house because local media repeatedly called it haunted even though inspections reveal no physical problem. What issue is this?
A seller knows that a prior occupant died peacefully in the home several years ago, and there is no physical defect. Which special disclosure issue is presented?
The doctrine of 'caveat emptor' (buyer beware) has been largely replaced by:
- → In a state that requires a written disclosure of a home's condition to the buyer, the disclosure form is filled out by:
- → Under TRID, the Loan Estimate replaced which older disclosure form that was previously provided to borrowers early in the loan process?
- → The Closing Disclosure must be received by the borrower at least three business days before closing. If closing is scheduled for Friday and no federal holiday falls during that week, when is the latest the borrower can receive the Closing Disclosure?
- → The Closing Disclosure replaced which two older disclosure forms that were previously used in residential mortgage transactions?
- → Under TRID, all of the following are included on Page 1 of the Loan Estimate EXCEPT.
- → A borrower receives a Loan Estimate and notices that the estimated title insurance fee is $1,200. At closing, the Closing Disclosure shows the title insurance fee is $1,400. The borrower was allowed to shop for title insurance from a list provided by the lender. Under TRID tolerance rules, is this increase permissible?
- → A lender's origination charge on the Loan Estimate is $2,000. At closing, the origination charge on the Closing Disclosure is $2,300. Under TRID, what must the lender do?
- → A borrower submits a mortgage loan application on Monday. Under TRID, by when must the lender provide the Loan Estimate?
- → The Closing Disclosure includes a section showing how much total interest the borrower will pay over the life of the loan. A borrower sees that for a $300,000 30-year fixed-rate loan at 6.5 percent, the total interest exceeds $382,000. What purpose does this disclosure serve?
- → A borrower is comparing Loan Estimates from two different lenders. What section of the Loan Estimate is most helpful for comparing the total cost of different loan offers?
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