Which fees on the Loan Estimate cannot exceed zero tolerance?

The correct answer is that origination fees cannot exceed zero tolerance on the Loan Estimate. Zero tolerance applies to fees that are charged by the lender or mortgage broker and that are not allowed to change from what is originally disclosed on the Loan Estimate. Origination fees, as these are charged directly by the lender for processing the loan, fall under this category.

In terms of understanding the tolerance levels for the other fees mentioned, recording fees and transfer taxes generally have a tolerance of 10%. This means they can increase by up to 10% without violating regulatory requirements. Title service fees, while they can vary, also typically have a tolerance level that allows some increase, again potentially reaching up to 10% if the charges come from third-party providers. However, any increases in origination fees must remain strictly within the limits set forth in the initial Loan Estimate provided to the borrower. Consequently, adherence to the zero tolerance rule is crucial for maintaining compliance and ensuring transparency in the lending process.