TRID Part 3

Question 1

How is the Loan Estimate Tolerance Guideline determined (Made in Good Faith, or not Made in Good Faith)?

Answer 1

1. ) Its whether made in good faith is determined by the difference in the initial cost estimate & the final costs charged at closing.
   - Closing costs greater than Loan Estimate = Not made in good faith.
   - Closing costs less than Loan Estimate = Acted in good faith.

Question 2

What is the Loan Estimate Tolerance Guideline?

Answer 2

It is defined as “How much of a change” can be tolerated between the LE and the CD?

Question 3

What are some items with a zero (0) tolerance for change between the LE and the CD?

Answer 3

• Fees paid to the creditor or a mortgage broker (origination fees).
  
  • Transfer taxes.
  • The cost of 3rd party services that the borrower is not allowed to shop for (typically appraisal, credit report, tax service, flood cert, etc. ).

Question 4

According to the LE Tolerance Guidelines, some 3rd party services that are charged the borrower have what tolerance change?

Answer 4

A cumulative tolerance of 10%.

-Combined, 3rd party services tolerance can add up to 10%, but no more than such.

Question 5

According to the LE Tolerance Guidelines, what are some items with a 10% (up or down) Tolerance?

Answer 5

• Recording fees.

- Fees to 3rd party service providers that the borrower is allowed to shop for.

Question 6

According to the LE Tolerance Guidelines, what are some items with no Tolerance limit?

Answer 6

• Fees for services that the owners choose for themselves.

- Fees that are paid per diem, such as pre-paid mortgage interest.

Question 7

What forms did the Closing Disclosure replace?

Answer 7

The existing HUD-1 form and the final Truth-in-Lending Statement.

Question 8

When must the Closing Disclosure be provided,, and who provides it?

Answer 8

• Within 3 busness days prior to loan consummation; and a final CD is delivered at consummation.
• It is provided by the Settlement Agent (Title Agent) to the seller.
• it is provided by the creditor (lender) to the borrower.

Question 9

What must the Closing Disclosure contain?

Answer 9

It must contain the actual terms and costs of the transactions.

Question 10

Must the Closing Disclosure provided 3 business days prior to consummation, and the Closing Disclosure provided at consummation contain the same information?

Answer 10

Yes, there must be not difference.

Question 11

What 3 items must the Closing Disclosure include if there is change to the CD due to a “Valid Change in Circumstance?”

Answer 11

1. ) Changes in the loan APR.
2. ) Change in the loan product.
3. ) The addition of a prepayment penalty.

Question 12

How long of a waiting period is given to the borrower if a new CD is provided, due to a “Valid Change in Circumstance?”

Answer 12

3 days.

Question 13

(Error Correction) If there are Non-numeric clerical errors & tolerance violations, when must a new CD be delivered to the borrower?

Answer 13

Within 60 calendar days.

Question 14

(Error Correction) If there is any excessive various between the LE and the CD, the Lender has how many days to refund the money?

Answer 14

60 days to refund.

Question 15

How long must the LE be kept by all settlement services?

Answer 15

3 years.

Question 16

How long must the CD be kept by all settlement services?

Answer 16

5 years.