When TRID disclosures first came out in October, we tried to find the positive by pointing out how much clearer the new disclosures were relative to the previous disclosures. We were impressed that a heavy-handed gov’t agency (CFPB) might have actually done something right.
But alas, we spoke too soon. To avoid “variance” or “tolerance” issues and delays, lenders are often forced to over-disclose fees and costs on initial disclosures. This both misleads and confuses borrowers.
But lenders unfortunately often do not have a choice; if unexpected fees surface or existing fees change unexpectedly (exceeding the tolerance limits**), lenders are forced to re-disclose and then wait 1 to 3 additional days, depending on the circumstances.
**Some fees have a 0% tolerance, meaning lenders cannot charge more than what was disclosed. And some fees have a 10% tolerance. In either case, lenders over-disclose up front to avoid re-disclosure issues later on.
Our competitor Academy Mortgage does a good job of explaining “tolerances” on their website: https://academymortgage.com/trid/tolerance
Borrowers and Realtors need to be aware of the over-disclosure issue so they are not alarmed when they see initial estimates.
Jay Voorhees
Founder/Broker | JVM Lending
(925) 855-4491 | DRE# 01524255, NMLS# 335646
