Pub. 2 2014 Issue 3

www.uba.org 10 In the zero tolerance bucket; there can be no increase for any item in this bucket in the amount paid at closing over the esti- mated amount on the loan estimate form for borrower paid: • Charges paid to the lender and/or broker for their own fees, such as origination charges; • Transfer taxes; • Fees paid to an affiliate of the lender or broker for a service required by the lender (this is a change from the current tolerances); and • Fees paid to an unaffiliated service provider for a service required by the lender if the borrower was not al- lowed to shop for the provider (which is not a zero tolerance item under current HUD regulations) In the 10 percent bucket, charges for services that can increase, but by no more than 10 percent in the aggregate are: • Fees paid to an third-party provider not affiliated with the lender for a service required by the lender if the lender permitted the borrower to shop and the borrower still selected off the lender’s provider list; and • Recording fees paid by the borrower Changes that can increase by an unlimit- ed amount over the estimated amounts on the loan estimate form include: • Prepaid interest; • Property insurance; • Amounts for escrow deposits (taxes, insurance); • Fees paid to third-party providers selected by the borrower and not on the lender’s list of providers; and • Charges paid for third-party services not required by the lender The lender can issue a revised Loan Estimate if a “changed circumstance” occurs. If a “changed circumstance” occurs causing an increase in charges above the applicable “tolerance level” the lender must provide an updated loan estimate form within three business days after having knowledge of the change. Examples of “changed circumstances” that would allow for revisions in the loan estimate include: • The consumer asks for a change; • Information provided in the applica- tion was inaccurate or has changed since the application; • New information as to the consumer or transaction is provided that the lender had not relied on; • The Loan Estimate expires; • Interest rate dependent charges (when the rate is locked by the con- sumer, lender must provide revised loan estimate showing all such changed charges); and • Extraordinary event occurs beyond the control of any party It is critical to start now on system chang- es, training (to include how to complete the new forms), policy and procedures/ processes. It may seem like the mandato- ry compliance date of Aug. 15, 2015, is far off, but the clock is ticking and there is a lot of work to be done. n  RESPA / TILA — continued from page 9