What is the term used for the maximum permissible amount that can be charged to a borrower beyond the Loan Estimate?

The term for the maximum permissible amount that can be charged to a borrower beyond the Loan Estimate is known as a tolerance violation. Under the Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA), lenders are required to provide borrowers with a Loan Estimate that outlines expected costs associated with the mortgage loan. This estimate has specific tolerance levels for different categories of fees, meaning that lenders can only charge the borrower amount variations that fall within those limits. If the actual fees exceed the amounts disclosed in the Loan Estimate beyond these specified tolerances, it constitutes a tolerance violation. This regulatory requirement helps protect borrowers from unexpected increases in the costs of obtaining a mortgage, ensuring transparency and consumer protection in the lending process.