Sec 1-Page 102

1. Question

GOOD FAITH TOLERANCE REQUIREMENTS

A borrower’s closing costs increase because additional prepaid interest, property insurance premiums, and escrow deposits are required before consummation.

How are these charges generally treated under TILA-RESPA tolerance rules?

A) These charges are subject to zero-tolerance limitations
B) These charges may increase without any tolerance limitation
C) These charges are prohibited after the Loan Estimate is issued
D) These charges may only increase with CFPB approval

2. Question

GOOD FAITH TOLERANCE REQUIREMENTS

A creditor allows a borrower to shop for a required settlement service, but the borrower selects a third-party provider that is not listed on the creditor’s written service provider list.

How are the resulting charges generally treated under tolerance rules?

A) Charges are subject to zero tolerance because the service was creditor-required
B) Charges may increase without tolerance limitation when the consumer chooses a provider not on the creditor’s written list
C) Charges are prohibited unless the provider is approved by the CFPB
D) The creditor must absorb any increase above the original estimate

3. Question

GOOD FAITH TOLERANCE REQUIREMENTS

A borrower independently hires a third-party provider for a service that was not required by the creditor.

How are these charges generally treated under federal tolerance rules?

A) Charges for services not required by the creditor may increase without tolerance limitation
B) Charges must remain within a zero-tolerance category
C) The creditor must reimburse all increases above the original estimate
D) Charges are permitted only if paid to non-affiliated providers

4. Question

GOOD FAITH TOLERANCE REQUIREMENTS

A lender significantly increases a disclosed fee at closing even though the original estimate was not based on the best information reasonably available at the time the Loan Estimate was issued.

Why could this violate federal disclosure standards?

A) Creditors may revise charges at any time before consummation
B) Fee increases are permitted only for FHA loans
C) Creditors may charge more than disclosed amounts only when the original estimate was based on the best information reasonably available at the time of disclosure
D) Tolerance rules apply only after loan closing

5. Question

GOOD FAITH TOLERANCE REQUIREMENTS

A creditor provides a borrower with a written list of settlement service providers four business days after the Loan Estimate is issued.

Why could this violate TILA-RESPA requirements?

A) Written service provider lists are optional disclosures
B) The written list must be provided within the same three-business-day period as the Loan Estimate
C) Service provider lists may only be delivered at consummation
D) Written lists are required only for FHA-insured loans

6. Question

GOOD FAITH TOLERANCE REQUIREMENTS

A creditor provides a written service provider list that identifies only one category of settlement service but fails to identify any available provider for another service the borrower may shop for.

Why could this violate federal disclosure rules?

A) Creditors are prohibited from identifying settlement service providers
B) Creditors must identify at least one available settlement service provider for each service
C) Provider lists may include only affiliated companies
D) Provider identification requirements apply only to commercial loans

7. Question

GOOD FAITH TOLERANCE REQUIREMENTS

A written service provider list fails to inform borrowers that they may select a different settlement service provider than those identified by the creditor.

Why could this violate TILA-RESPA disclosure rules?

A) Borrowers must always use providers selected by the creditor
B) Creditors are prohibited from discussing alternative providers
C) The written list must state that the consumer may choose a different provider for the service
D) Alternative provider disclosures apply only to refinance transactions

8. Question

GOOD FAITH TOLERANCE REQUIREMENTS

A creditor’s written service provider list includes both services the consumer may shop for and services for which shopping is not permitted, but the list does not clearly distinguish between the two categories.

Why could this create a compliance issue?

A) Creditors may never list non-shoppable services
B) Services for which consumers may not shop must be clearly and conspicuously distinguished from services for which consumers may shop
C) All settlement services must be placed into a single category
D) Shopping disclosures apply only to title services

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