Disclosing A No Cost Loan On Loan Estimate (Reg Z)

You disclose all of the costs that the consumer would ordinarily pay, including those costs that the creditor expects to waive or absorb. If you expect to waive some or all of those costs, you may also disclose a lender credit amount. The CFPB expects that the costs to be waived in a "no cost" loan will be disclosed in order for the consumer to be able to make an informed choice from available mortgage loans, in particular because the actual costs of "no cost" loans is typically "buried" in the interest rate offered.

Creditors that disclose a lender credit amount on the Loan Estimate must be aware that any reduction in the lender credit amount (for example, to match a reduced final cost of a service listed on the Loan Estimate) would be considered an increase in costs to the consumer, with a zero tolerance percentage.