trid-tolerance

Classifies closing costs into zero, 10% cumulative, and unlimited tolerance buckets under 12 CFR § 1026.19(e)(3). Validates changed circumstances for revised Loan Estimates and computes cure amounts. Use when reviewing a Closing Disclosure against a Loan Estimate, calculating tolerance variances, determining whether a revised LE is permitted, or computing cure amounts for tolerance violations.

TRID Tolerance

Classifies fees into tolerance buckets, calculates CD-vs-LE variances, validates changed circumstances, and computes cure amounts under Regulation Z.

Prerequisites

Loan Estimate (original + any revised, with dates)
Closing Disclosure (final or proposed)
Creditor's written list of service providers (shopped vs. unshopped classification)
Documentation of any changed circumstances

Tolerance Categories

Zero Tolerance (0%) — Cannot Increase

Any increase requires a valid changed circumstance and revised LE.

| Category | Examples | |---|---| | Creditor/broker fees | Origination, application, underwriting, processing, discount points, commitment, rate lock | | Affiliate fees | Any fee paid to lender/broker affiliate (title, appraisal, etc.) | | Transfer taxes | State/local transfer tax, mansion tax, documentary stamps | | Services borrower cannot shop for | Appraisal (creditor-selected), credit report, flood determination, tax monitoring |

10% Cumulative Tolerance

The aggregate total of all 10% items on CD cannot exceed the aggregate total on LE by more than 10%.

| Category | Examples | |---|---| | Recording fees | Deed recording, mortgage/deed of trust recording | | Shopped services (from lender's list) | Lender's title, settlement/closing, title search, survey, notary, pest, attorney |

If borrower chose a provider not on lender's written list, that fee shifts to unlimited tolerance.

Unlimited Tolerance

May change freely; original LE must have been made in good faith.

Prepaid interest, insurance premiums (homeowner's, flood, MI)
Initial escrow deposits (taxes, insurance, MI, aggregate adjustment)
Property costs not required by creditor (HOA, assessments, prepaid taxes)
Services from a provider not on lender's list
Optional services (home warranty, optional owner's title, elective inspections)

Variance Calculation

Zero Tolerance

For each zero-tolerance fee: Variance = CD Amount − LE Amount

Compliant: every variance ≤ $0
Violation: any positive variance is the cure amount for that fee