What kind of tolerance does our origination fee on the GFE have?

What kind of tolerance does our origination fee on the GFE have?

• A. Ten percent
• B. Five percent
• C. Zero
• D. Two percent

Answer: (C)

The origination fee on the Good Faith Estimate (GFE) is categorized under a zero tolerance provision. This means that the lender is required to adhere strictly to the original fee quoted on the GFE; any increase in the origination fee is not permitted unless the borrower chooses a different loan product or there are changes made to the loan that affect the fees. The purpose of zero tolerance is to protect consumers from unexpected cost increases during the loan process, ensuring that borrowers can rely on the fees disclosed to them when they begin their mortgage process. Understanding this concept is crucial as it promotes transparency and accountability from lenders, allowing borrowers to make informed decisions without the concern of unexpected additional costs related to the origination fee.

The origination fee on the Good Faith Estimate (GFE) is categorized under a zero tolerance provision. This means that the lender is required to adhere strictly to the original fee quoted on the GFE; any increase in the origination fee is not permitted unless the borrower chooses a different loan product or there are changes made to the loan that affect the fees. The purpose of zero tolerance is to protect consumers from unexpected cost increases during the loan process, ensuring that borrowers can rely on the fees disclosed to them when they begin their mortgage process.

Understanding this concept is crucial as it promotes transparency and accountability from lenders, allowing borrowers to make informed decisions without the concern of unexpected additional costs related to the origination fee.