TILA Mortgage Loan Officer Practice Test

Charges that have zero tolerance restrictions under the Truth in Lending Act (TILA) specifically refer to those fees that can’t increase from the time of the loan estimate to the closing. In this context, the correct choice relates to appraisal fees, which are typically considered zero tolerance charges.

Appraisal fees cannot change from what is reflected in the loan estimate, as they are specifically required to be disclosed accurately to borrowers to prevent any surprises at closing. This regulation ensures that the lender does not impose unexpected fees related to the assessment of the property’s value, which safeguards the borrower from potential overcharges.

On the other hand, title insurance fees may vary due to state regulations or third-party fees, while third-party services not paid to the creditor and charges paid to mortgage brokers or their affiliates are not classified as zero tolerance items because they may be subject to different disclosure and tolerance levels. Thus, the classification of appraisal fees under zero tolerance emphasizes the importance of transparency and borrower protection in mortgage transactions.