Navigating Revised Estimates Under TRID When Lenders Can Reset Closing Cost Tolerances — And When They Cannot By RENEA RUSH, CRCM, CCBIA, Virtual Compliance Officer, Compliance Alliance The TILA-RESPA Integrated Disclosure (TRID) rule was designed to make consumer disclosures for mortgage loans easier for customers to understand and to prevent those customers from being surprised at closing by the fees charged. Banks are required to exercise good faith when issuing the required disclosures. Good faith means ensuring the bank understands the transaction and includes all closing costs that will normally be required to be paid. Closing cost tolerances are limited and can be as low as 0% or may have no specific tolerance limitation, depending on the type of fee. When the Loan Estimate is issued, those tolerance amounts generally establish the baseline for determining good faith unless Regulation Z permits the creditor to use a revised estimate. Understanding when estimates may be revised — and what a revision permits — is essential for compliance with the regulations. TRID identifies six circumstances in which a creditor may be permitted to use revised estimates for purposes of determining good faith: (1) a changed circumstance affecting settlement charges, such as an extraordinary event or inaccurate, new, or changed information relied upon in providing the Loan Estimate; (2) a changed circumstance affecting the consumer’s eligibility for the loan or the value of the property securing the loan; (3) revisions requested by the consumer; (4) changes in 20 WEST VIRGINIA BANKER
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