If fees for third-party settlement service providers are paid directly to a creditor or affiliate, the tolerance for differences between the estimated and actual charges is:

• A. 0%
• B. 5%
• C. 10%
• D. 1%

Answer: (A)

Zero tolerance applies when the lender or an affiliated party handles the third-party settlement service. If fees for those services are paid directly to the creditor or their affiliate, the actual charges at closing must match exactly what was estimated. There’s no room for variance, so any difference would require adjusting back to the estimated amount. This protects borrowers from being charged more for services handled by the lender’s own affiliate. Other tolerance categories exist for services the borrower can shop for or for other fee groups, but they don’t apply to charges paid directly to the creditor or affiliate.