Blog/The hidden cost of fee cures: A recent cost analysis on how to help uncover and prevent fee cures

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The hidden cost of fee cures: A recent cost analysis on how to help uncover and prevent fee cures

Reducing costs for lenders on a preventable expense

Richard Lombardi, Senior Director, Property Data Solutions, ICE Mortgage Technology
March 6, 2025 | 5 mins

Volatile mortgage loan volume and profits in today’s real estate market are causing lenders to seek out ways to reduce expenses. It is widely understood that fee cures are a cost of doing business, but their recurring rate and effect on profit margins remain largely unmeasured due to a lack of published data on the issue. ICE recently conducted a cost analysis which performed a deep dive into a previously undetected and very preventable expense eroding mortgage lenders profit margins, the depth at which fee cures eat into lender profitability.

The study analyzed nearly 90,000 loans from eight lenders over a six-month period to find out how often fee cures happen and to quantify their expense to lenders. The findings and implications from this study were significant. ICE’s study found fee cures to be a preventable cost that is exceedingly common, occurring on more than one in every three loans.

What are fee cures?

Fee cures are costs paid for by the lender if the amounts paid by the consumer at closing exceed the amounts disclosed by more than the applicable tolerance threshold.

The TILA-RESPA Integrated Disclosure rule, known as TRID, requires mortgage lenders to communicate the costs and fees associated with purchasing and refinancing a home. If a lender makes errors in disclosing or changing certain types of fees, they are responsible for detecting and rectifying those errors.

TRID sets tolerances for how much fees can change after they have been disclosed, and those tolerances fall into three categories: zero tolerance, 10% tolerance and no tolerance.

Zero tolerance - should not increase after the delivery of the Loan Estimate. Unless an event that triggers a revised Loan Estimate occurs, increases to fees in this category result in a tolerance violation.
10% tolerance fees - includes third-party services that borrowers can shop for, such as home inspectors, and other expenses, such as county recording, title and settlement fees. Unlike zero tolerance fees, which are assessed individually, 10% tolerance fees are assessed as a cumulative category. If the sum of all fees in the 10% tolerance category increases by 10% or more after delivery of the Loan Estimate, then the lender is required to pay the difference in fee cures.
No tolerance fees - lenders may increase fees that fall in the no tolerance category as long as the fees originally disclosed were based on the best information reasonably made available at the time.

Four most common types of fee cures

Of the top 20 fee cure causes studied in the cost analysis, lenders spent the most on zero tolerance fee cures. In fact, four of the top five reasons for fee cures fall into the zero tolerance category — accounting for 61% of unadjusted fee cure costs.

The study was able to identify the four most common causes of fee cures, which were:

Lender fees - zero tolerance fees that accounted for 28% of dollars spent on fee cures and impacted 3.6% of loans.
Recording fees and transfer taxes - government-imposed fees that lenders cannot establish, negotiate or control. Typically, recording fees have a 10% tolerance and transfer taxes have a zero tolerance, both of which accounted for 20% of labor-adjusted fee cures and occurred on 28% of loans studied.
Title and settlement fees - fees established by vendors that are placed in the 10% tolerance or zero tolerance category based on a borrower’s ability to shop, accounted for 7% of labor-adjusted fee cure dollars and occurred on 5% of loans studied.
Appraisal fees- fall into the zero tolerance category, accounted for 13% of labor-adjusted fee cure dollars spent and occurred on 11% of loans studied.

Fee cure cost analysis findings

ICE’s industry-first study on fee cures brings to light their impact on costs and prevalence. The study concluded that TRID violations necessitating fee cures were increasingly common, occurring on 35% of loans on average. Not only were fee cures frequent, but they were also very costly, when averaged across all loans the reimbursement cost of fee cures alone drove per loan production costs up $128.50.

Further, curing fees is a time-consuming process that requires action from many departments. ICE calculated the hours of work needed to perform these tasks and concluded the extra labor associated with fee cures amounted to an average of $1,096.50 per loan, bringing the total cost of fee cures up to an average of $1,225.00 per loan.

By mitigating fee cures, the study identified that lenders could recover more than $1.2 million on every 1,000 loans produced. Ultimately, with the right fee solution products in place, lenders can streamline and automate the closing fee process, preventing fee cures by providing accurate, near real-time loan estimate and closing disclosure fees, which saves lenders significant time and money.

To learn more about how the right technology can help identify and prevent fee cures, download our whitepaper, The hidden cost of fee cures.

The information provided herein is for general informational purposes only, and does not, nor is it intended to, constitute legal advice.