Title Insurance Tolerance and the “Revised” Loan Estimate

The lender's title policy and recording fee are in the 10% cumulative tolerance category because the lender selected the title provider and the provider is an affiliate of the lender. Transfer taxes are in the 0% tolerance category, so they are not part of this calculation. The original baseline is $1,450 + $125 = $1,575. The permitted maximum is 110% of that baseline: $1,575 × 1.10 = $1,732.50. The April 9 revised figures total $1,950 + $175 = $2,125. Without a valid changed circumstance resetting the baseline, the excess is $2,125 − $1,732.50 = $392.50. That excess must be cured; it is not excused because the title agency is affiliated with the lender.

Not automatically. A revised Loan Estimate resets tolerances only when the increase results from a valid changed circumstance-an event beyond the lender's control, new information the borrower provided, or information the lender did not rely on because it was not reasonably discoverable. A fee increase by the lender's affiliated title agency is generally within the lender's control and is not a valid changed circumstance. The newly required $500 endorsement could qualify if the need was genuinely unknown and not reasonably discoverable on March 3, but the lender must document that fact. Timing also matters: the revised Loan Estimate must be delivered within three business days of receiving the information and before consummation. Here, information was received April 8 and the revised estimate was issued April 9, so timing is acceptable for a valid change. But the loan officer's stated reason-that the title company simply raised its fees-does not support a reset. The file should be treated as having no valid reset unless the endorsement requirement is separately documented.

If no valid changed circumstance exists, the lender must cure the $392.50 tolerance violation. The cure is made by refunding the excess to the borrower and reflecting it on a corrected Closing Disclosure, generally at consummation or within 60 days after consummation. The lender cannot simply rely on the April 9 revised Loan Estimate. If a valid changed circumstance is documented for only the $500 endorsement, the analysis changes: the new baseline becomes the original baseline plus the documented changed-circumstance amount, and the recording increase is tested separately. The lender must retain evidence of when the information was received, why it was not reasonably discoverable earlier, and when the revised estimate was delivered. Partial documentation is better than none, but it does not excuse fees that remain outside tolerance.