What fee is Kate allowed to collect before a Loan Estimate is issued?

The ability to collect fees before a Loan Estimate is issued is governed by regulations set forth in the Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA). According to these regulations, a loan originator may collect certain fees before the Loan Estimate is provided.

The credit report fee is an allowable fee to collect at this stage because it is associated directly with obtaining a consumer report for underwriting the loan. It is not considered a "application fee" as defined in the regulations, which typically cover broader administrative costs related to processing a loan application.

On the other hand, fees such as the application fee or processing fee may be viewed as a charge for services which might be tied to the loan application process as a whole, usually necessitating that the borrower receives a Loan Estimate before any fees are collected. The underwriting fee is generally related to a service performed later in the process and, like the application fee, would typically be subject to the same limitations as other upfront charges not explicitly permitted by TILA and RESPA prior to issuing the Loan Estimate.

Thus, collecting the credit report fee before the Loan Estimate is issued aligns with regulatory guidelines, making it the correct answer.