Which item is considered a Zero Tolerance item on the Loan Estimate?

Zero Tolerance items on the Loan Estimate refer to specific fees or charges that cannot increase at loan closing compared to what was initially disclosed on the Loan Estimate. This means that if the fees for these items are disclosed in the Loan Estimate, they must remain the same by the time the borrower closes the loan.

The origination fee is considered a Zero Tolerance item because it is a charge for the lender's services in processing the loan and must be disclosed accurately upfront. If any changes occur and the final fee at closing exceeds what was disclosed, this would violate the Zero Tolerance rule, protecting the consumer from unexpected costs.

Homeowner's insurance, discount points, and title search fees are subject to different tolerances. While they can sometimes vary, they are not classified as Zero Tolerance items, allowing for more flexibility in their final costs provided they do not exceed certain thresholds. Thus, the origination fee stands out as a critical item that ensures transparency and consistency in the lending process, ultimately benefiting the borrower.