Mortgage Loan Originator (MLO) Licensing Practice Test 2026 – Your All-in-One Guide to Exam Success!

Under the TILA-RESPA Integrated Disclosure (TRID) rules, appraisal fees are classified as a "zero tolerance" fee. This classification means that the fees for an appraisal cannot increase from what is initially disclosed to the borrower in the Loan Estimate. Therefore, lenders must ensure that the estimated appraisal fee accurately reflects the actual fee charged to the borrower at closing. If there is any increase in the appraisal fee beyond what was disclosed, the lender is required to absorb the cost, as borrowers should not face unexpected changes in their closing costs.

This zero tolerance policy is designed to provide greater transparency and protect consumers from unanticipated costs, ensuring that borrowers can trust the fee estimates they receive during the mortgage application process. It is important for mortgage loan originators to be aware of these classifications as they navigate compliance with TRID regulations and manage client expectations.