What are the three categories for fees presented on the Loan Estimate (LE)?

The three categories for fees presented on the Loan Estimate (LE) are indeed classified as zero tolerance, 10% tolerance, and no tolerance. This categorization is essential for consumers to understand how their loan costs may change from the Loan Estimate to the Closing Disclosure.

Zero tolerance fees are those fees that cannot increase at all between these two documents. If a borrower sees a zero tolerance fee on the LE, they should expect the same amount on the Closing Disclosure, with no variation.

The 10% tolerance category includes fees that can increase, but only by a combined total of 10% or less. This allows for some minor fluctuations in the total costs for services used by the borrower. However, all fees within this category must still be disclosed accurately on the LE and be within the specified bounds on the Closing Disclosure.

No tolerance fees are those where there is no limit to how much they can increase, provided the borrower agrees to them. This can often include certain third-party charges that are not required but might be selected by the borrower, allowing for greater flexibility and potential variations in costs.

This framework helps protect consumers by ensuring they are informed of potential changes to their loan costs and can plan accordingly. Understanding these categories is critical for anyone involved in the