What regulation allows third party fees disclosed on the Loan Estimate to carry a 10% tolerance?

The regulation that allows third-party fees disclosed on the Loan Estimate to carry a 10% tolerance is the TILA-RESPA Integrated Disclosure Rule (TRID). This rule was implemented to simplify the process of disclosing the costs associated with obtaining a mortgage, enhancing transparency for consumers. Under TRID, lenders must provide a Loan Estimate that outlines the estimated costs of the mortgage, including third-party fees.

The 10% tolerance applies to certain charges a borrower may encounter, meaning that if the actual costs at closing are within 10% of the estimates provided in the Loan Estimate, they are considered compliant with the regulation. This gives lenders some flexibility in fee quoting while ensuring that borrowers are protected from significant increases in their loan costs.

The other regulations mentioned, like the Truth-In-Lending Act and the Real Estate Settlement Procedures Act, do not specifically establish the 10% tolerance related to third-party fees disclosed on Loan Estimates. They do play important roles in consumer protection and transparency in financial transactions but do not focus on the tolerance framework that TRID provides. The Consumer Financial Protection Bureau (CFPB) does oversee TRID, but it is the TRID rule itself that explicitly contains the tolerance provisions for third-party fees. Therefore, the correct answer