TRID CD Tolerance Reference
Determines whether CD fees comply with TRID tolerance limits set by the most recent valid LE, and calculates any required cure.
Prerequisites
- Most recent valid LE (original or revised) with line-item fees
- Final CD with line-item fees
- Lender's written list of service providers (classifies shopped services)
- Documentation of any changed circumstances supporting a revised LE
Tolerance Categories
Authority: 12 CFR § 1026.19(e)(3). Always compare CD fees to the most recent valid LE.
| Category |
Rule |
Measurement |
| Zero |
Cannot increase at all |
Per item |
| 10% Cumulative |
CD category total ≤ LE total × 110% |
Aggregate |
| Unlimited |
May change freely (good faith at LE required) |
None |
Zero Tolerance (0%)
Any increase from LE to CD is a violation requiring cure.
| Category |
Examples |
| Creditor/broker fees |
Origination, application, underwriting, processing, discount points, commitment, rate lock |
| Affiliate fees |
Any fee to entity affiliated with creditor/broker |
| Transfer taxes |
State/local transfer taxes, mansion tax, documentary stamps |
| Services borrower cannot shop |
Appraisal (creditor-selected), credit report, flood determination, tax monitoring |
Compliant: every item variance ≤ $0. Any positive variance = cure amount.
10% Cumulative Tolerance
Measured as category aggregate, not per item.
| Category |
Examples |
| Recording fees |
Deed recording, mortgage recording, other recording |
| Shopped services from lender's list |
Title policies, title search, settlement/closing fee, notary, survey, pest inspection, settlement attorney |
If borrower chose a provider not on lender's written list, that fee moves to unlimited tolerance.
Cure calculation:
- Maximum permitted = LE total × 110%
- Excess = CD total − maximum permitted (if positive)
Unlimited Tolerance
No cure required. Includes:
- Prepaid interest, insurance premiums (homeowner's, flood, hazard)
- Initial escrow deposits (taxes, insurance, MIP, aggregate adjustment)
- Property costs not required by creditor (prepaid taxes, HOA)
- Services where borrower chose provider off lender's list
- Optional services (home warranty, optional owner's title, non-required inspections)
Changed Circumstances
A valid changed circumstance permits a revised LE that resets tolerances for affected fees only. Per 12 CFR § 1026.19(e)(3)(iv):
- Deliver revised LE within 3 business days of learning of the change
- At least 4 business days before consummation
| Type |
Examples |
| Extraordinary event |
Natural disaster, war, civil unrest |
| Information inaccuracy |
Income/assets differ; property differs from disclosed |
| Previously unavailable info |
Title defect, survey encroachment |
| Borrower-requested change |
Different product, property, or added borrower |
| Rate lock |
Borrower locks after floating |
| LE expiration |
Closing delayed beyond 10 business days after LE |
Invalid reasons: creditor error, market fluctuation, processing delays, simple underestimates, bad-faith original estimate.
Cure Requirements
Authority: 12 CFR § 1026.19(f)(2)(v). All within 60 calendar days after consummation:
- Refund excess amount to borrower
- Provide corrected CD reflecting the cure
- Document cure in loan file
| Category |
Maximum Permitted |
Cure |
| Zero tolerance |
= LE amount |
CD − LE (if positive) |
| 10% cumulative |
= LE total × 110% |
CD total − max permitted (if positive) |
Pitfalls
| Mistake |
Correction |
| Testing 10% items individually |
Measure as cumulative category total |
| Applying 10% to affiliate fees |
Affiliate fees are zero tolerance |
| Changed circumstance increasing unrelated fees |
Only revise affected fees |
| Revised LE > 3 business days after learning of change |
Must issue within 3 business days |
| Comparing net fees after credits |
Compare gross fees; credits don't affect tolerance |
| Missing 60-day cure deadline |
Calendar from consummation date |
Key Rules
- Seller credits don't affect tolerance — always compare gross fees
- Specific lender credits tied to a fee reduce it for tolerance; general credits do not
- Construction loans: tolerances apply separately per phase
- Subordinate financing: each loan has independent tolerances; no fee-shifting between loans
- Always verify affiliate status — misclassification as 10% item is a common exam finding
References
- 12 CFR § 1026.19(e)(3) — Tolerance categories
- 12 CFR § 1026.19(e)(3)(iv) — Changed circumstances
- 12 CFR § 1026.19(f)(2)(v) — Cure requirements
- CFPB Official Interpretation, Comments 19(e)(3)(i)-1 through -6
- CFPB Official Interpretation, Comments 19(e)(3)(iv)-1 through -6
- CFPB TRID Small Entity Compliance Guide, Section 7
1---2name: cd-tolerance-reference3description: Guides the agent through TRID tolerance compliance under 12 CFR § 1026.19(e)(3), comparing Closing Disclosure fees to Loan Estimate fees across zero, 10% cumulative, and unlimited tolerance categories. Use when reviewing a CD for tolerance variances, determining whether a revised LE is permitted, calculating cure amounts, or resolving post-closing tolerance violations.4---5
6# TRID CD Tolerance Reference
7
8Determines whether CD fees comply with TRID tolerance limits set by the most recent valid LE, and calculates any required cure.
9
10## Prerequisites
11
12- Most recent valid LE (original or revised) with line-item fees
13- Final CD with line-item fees
14- Lender's written list of service providers (classifies shopped services)
15- Documentation of any changed circumstances supporting a revised LE
16
17## Tolerance Categories
18
19Authority: 12 CFR § 1026.19(e)(3). Always compare CD fees to the most recent valid LE.
20
21| Category | Rule | Measurement |
22|----------|------|-------------|
23| Zero | Cannot increase at all | Per item |
24| 10% Cumulative | CD category total ≤ LE total × 110% | Aggregate |
25| Unlimited | May change freely (good faith at LE required) | None |
26
27## Zero Tolerance (0%)
28
29Any increase from LE to CD is a violation requiring cure.
30
31| Category | Examples |
32|----------|---------|
33| Creditor/broker fees | Origination, application, underwriting, processing, discount points, commitment, rate lock |
34| Affiliate fees | Any fee to entity affiliated with creditor/broker |
35| Transfer taxes | State/local transfer taxes, mansion tax, documentary stamps |
36| Services borrower cannot shop | Appraisal (creditor-selected), credit report, flood determination, tax monitoring |
37
38Compliant: every item variance ≤ $0. Any positive variance = cure amount.
39
40## 10% Cumulative Tolerance
41
42Measured as **category aggregate**, not per item.
43
44| Category | Examples |
45|----------|---------|
46| Recording fees | Deed recording, mortgage recording, other recording |
47| Shopped services from lender's list | Title policies, title search, settlement/closing fee, notary, survey, pest inspection, settlement attorney |
48
49If borrower chose a provider **not** on lender's written list, that fee moves to unlimited tolerance.
50
51Cure calculation:
52- Maximum permitted = LE total × 110%
53- Excess = CD total − maximum permitted (if positive)
54
55## Unlimited Tolerance
56
57No cure required. Includes:
58
59- Prepaid interest, insurance premiums (homeowner's, flood, hazard)
60- Initial escrow deposits (taxes, insurance, MIP, aggregate adjustment)
61- Property costs not required by creditor (prepaid taxes, HOA)
62- Services where borrower chose provider off lender's list
63- Optional services (home warranty, optional owner's title, non-required inspections)
64
65## Changed Circumstances
66
67A valid changed circumstance permits a revised LE that resets tolerances for **affected fees only**. Per 12 CFR § 1026.19(e)(3)(iv):
68- Deliver revised LE within **3 business days** of learning of the change
69- At least **4 business days** before consummation
70
71| Type | Examples |
72|------|---------|
73| Extraordinary event | Natural disaster, war, civil unrest |
74| Information inaccuracy | Income/assets differ; property differs from disclosed |
75| Previously unavailable info | Title defect, survey encroachment |
76| Borrower-requested change | Different product, property, or added borrower |
77| Rate lock | Borrower locks after floating |
78| LE expiration | Closing delayed beyond 10 business days after LE |
79
80**Invalid reasons:** creditor error, market fluctuation, processing delays, simple underestimates, bad-faith original estimate.
81
82## Cure Requirements
83
84Authority: 12 CFR § 1026.19(f)(2)(v). All within **60 calendar days** after consummation:
85
861. Refund excess amount to borrower
872. Provide corrected CD reflecting the cure
883. Document cure in loan file
89
90| Category | Maximum Permitted | Cure |
91|----------|-------------------|------|
92| Zero tolerance | = LE amount | CD − LE (if positive) |
93| 10% cumulative | = LE total × 110% | CD total − max permitted (if positive) |
94
95## Pitfalls
96
97| Mistake | Correction |
98|---------|-----------|
99| Testing 10% items individually | Measure as cumulative category total |
100| Applying 10% to affiliate fees | Affiliate fees are zero tolerance |
101| Changed circumstance increasing unrelated fees | Only revise affected fees |
102| Revised LE > 3 business days after learning of change | Must issue within 3 business days |
103| Comparing net fees after credits | Compare **gross** fees; credits don't affect tolerance |
104| Missing 60-day cure deadline | Calendar from consummation date |
105
106## Key Rules
107
108- **Seller credits** don't affect tolerance — always compare gross fees
109- **Specific lender credits** tied to a fee reduce it for tolerance; **general credits** do not
110- **Construction loans:** tolerances apply separately per phase
111- **Subordinate financing:** each loan has independent tolerances; no fee-shifting between loans
112- Always verify affiliate status — misclassification as 10% item is a common exam finding
113
114## References
115
116- 12 CFR § 1026.19(e)(3) — Tolerance categories
117- 12 CFR § 1026.19(e)(3)(iv) — Changed circumstances
118- 12 CFR § 1026.19(f)(2)(v) — Cure requirements
119- CFPB Official Interpretation, Comments 19(e)(3)(i)-1 through -6
120- CFPB Official Interpretation, Comments 19(e)(3)(iv)-1 through -6
121- CFPB TRID Small Entity Compliance Guide, Section 7
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