TRID Compliance and Disclosure Management

The Loan Estimate (LE) must be delivered to the borrower within 3 business days of receiving a loan application (defined as the receipt of six data elements: name, income, SSN, property address, estimated property value, and loan amount sought). The LE must accurately disclose the loan terms, projected payments, costs at closing, and other costs including lender credits and cash to close. Timing compliance requires tracking the application receipt date and ensuring LE delivery (or mailing) within the 3-business-day window. The LE cannot be revised except for valid changed circumstances: borrower-requested changes, new information affecting eligibility or pricing, actual closing costs that differ from estimates within tolerance limits, and changes due to acts of God or other extraordinary circumstances. Each revision requires a new LE with clear documentation of the changed circumstance that justifies the revision. Over-disclosing fees to avoid tolerance violations is not permitted—fees must be disclosed in good faith, meaning the lender must use the best information reasonably available at the time.

TRID establishes three tolerance categories for fee accuracy. Zero tolerance fees cannot increase at all from LE to CD unless a valid changed circumstance occurs: these include lender origination charges, points, adjusted origination charges, and transfer taxes. Ten percent tolerance fees can increase by up to 10% in aggregate: these include third-party fees for services the lender requires from providers the borrower cannot shop for (credit report, flood certification, appraisal when lender selects the provider). Unlimited tolerance fees can increase without restriction: these include third-party fees for services the borrower can shop for and selects their own provider, homeowner’s insurance, title insurance (when the borrower selects the provider), and prepaid interest. Tolerance management requires: documenting the shopping list provided to borrowers (proving which fees are shoppable), tracking fee estimates against actual charges, and calculating aggregate tolerance at closing. Tolerance violations require a cure—refund of the excess amount—within 60 calendar days of closing.

The Closing Disclosure (CD) must be received by the borrower at least 3 business days before the consummation date (closing). Saturday is a business day for CD receipt purposes (unless the lender is closed on Saturdays), but Sundays and federal holidays are not. The 3-business-day waiting period resets if certain changes occur between initial CD delivery and closing: a change in APR of more than 0.125% for fixed-rate loans (0.25% for adjustable-rate loans), a change in loan product (e.g., fixed to adjustable), or the addition of a prepayment penalty. The CD must accurately reflect all final settlement charges, prorations, and cash-to-close calculations. Coordination between the lender, settlement agent, and real estate agents is critical—the lender prepares the lender-side CD, and the settlement agent prepares the settlement-side CD (or a combined document in some workflows). Post-closing, the lender must compare the CD fees against the LE fees, calculate tolerance, and issue any required cure within 60 days.