United States
Hong KongTolerance levels and cures
Zero tolerance for the creditor's own charges, services the consumer cannot shop for and transfer taxes. Ten percent cumulative tolerance for recording fees and shoppable third-party services. Exceeding either requires a cure to the consumer.
Three buckets, two tolerances, and one distinction that decides which bucket a charge falls into.
Zero tolerance
These charges may not increase from the Loan Estimate to the Closing Disclosure at all.
- Fees paid to the creditor or a mortgage broker
- Fees for a service the consumer cannot shop for
- Transfer taxes
The logic is that these are within the creditor's knowledge or control, so getting them wrong is the creditor's problem. No increase at all.
Ten percent cumulative tolerance
These may increase, but only by 10 percent in aggregate rather than individually.
- Recording fees
- Charges for third-party services the consumer may shop for, where the provider is on the creditor's written list
Cumulative is the word doing the work. One fee can rise by more than 10 percent as long as the group does not.
A shoppable service where the consumer chose a provider NOT on the creditor's written list falls outside both tolerances. The consumer went their own way, so the creditor is not held to its estimate. This is the distinction exam questions turn on.
What a cure is
When a tolerance is exceeded, the creditor refunds the excess to the consumer and delivers a corrected Closing Disclosure.
The refund is not optional and it is not a matter of negotiation. The rule assigns the cost of a bad estimate to the party that made it. That is the whole design.
Valid changes of circumstance
A tolerance can be reset by a genuine changed circumstance - new information the creditor did not have, a change requested by the consumer, or an expired Loan Estimate.
The creditor then issues a revised Loan Estimate, and the new figures become the baseline. What it cannot do is reset a tolerance because it simply estimated badly.
The APR tolerances are separate
Do not confuse fee tolerances with APR accuracy. The APR is treated as accurate within 0.125 percent on a regular transaction and 0.25 percent on an irregular one, and exceeding that is what triggers a new three-business-day wait.
Common questions
What are the TRID tolerance levels?
Zero tolerance for creditor charges, non-shoppable services and transfer taxes. Ten percent cumulative for recording fees and shoppable third-party services from the creditor's list.
What is a tolerance cure?
A refund of the excess to the consumer with a corrected Closing Disclosure, required whenever a tolerance is exceeded.
What if the consumer picks their own provider?
A shoppable service from a provider not on the creditor's written list falls outside both tolerances.
Can a tolerance be reset?
Yes, by a valid changed circumstance, with a revised Loan Estimate. Not by the creditor having estimated poorly.
What is the APR tolerance?
0.125 percent on a regular transaction and 0.25 percent on an irregular one. That is separate from fee tolerances.