CFPB TRID Sec. 7 - What charges are subject to a 10% cumulative tolerance?

Compliance > Regulation Z - TILA / TRID Specific > Loan Estimates
Q:  What charges are subject to a 10% cumulative tolerance?
 
A:  Charges for third-party services and recording fees paid by or imposed on the consumer are grouped together and subject to a 10% cumulative tolerance. This means the consumer may be charged more than the amount disclosed on the Loan Estimate for any of these charges so long as the total sum of the charges added together does not exceed the sum of all such charges disclosed on the Loan Estimate by more than 10%. (§ 1026.19(e)(3)(ii))
 
These charges are:
 
  • Recording fees (Comment 19(e)(3)(ii)-4);
  • Charges for third-party services where:
    • The charge is not paid to the creditor or the creditor’s affiliate (§ 1026.19(e)(3)(ii)(B)); and
    • The consumer is permitted by the creditor to shop for the third-party service, and the consumer selects a third-party service provider on the creditor’s written list of service providers, or the consumer is permitted by the creditor to shop (based on the facts and circumstances) for the third-party service, but the creditor fails to provide the written list of service providers. (§§ 1026.19(e)(3)(ii)(C); 1026.19(e)(1)(vi); Comments 19(e)(3)(ii)-3 and -6, 19(e)(3)(iii)-2, and 19(e)(1)(vi)-1 through 7)
 
NOTE: Remember, when a creditor allows a consumer to shop for a third-party service and the consumer chooses a third-party service provider not identified on the creditor’s list, the charge is not subject to a tolerance limitation (See section 7.3 above).
 
 
 
This Loan Estimate / LE information can be found in the CFPB's TILA-RESPA Integrated Disclosure rule compliance guide - http://www.consumerfinance.gov/regulatory-implementation/tila-respa/
 

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