Which Closing Costs Fall in the 10 Percent TRID Tolerance Bucket

The Loan Estimate gives a consumer an early estimate of settlement costs. At closing, some amounts may change within defined limits. The 10 percent category is an aggregate limit for specified charges, not a general 10% cushion for every closing cost.

Which charges are generally in the category

The 10 percent aggregate category includes recording fees and qualifying third-party services. For a service the creditor requires and allows the consumer to shop for, the category depends on the list and provider facts: a provider on the list or no selection generally falls in the 10 percent bucket; an unaffiliated provider selected off a properly delivered list generally falls in the no-tolerance comparison category. If a required list was omitted, CFPB commentary generally applies the 10 percent category to an unaffiliated provider. A creditor or affiliate payee generally receives zero-tolerance treatment. Apply the exact conditions in Regulation Z.

Aggregate the covered charges

Compare the total estimated amount for all covered charges in the 10 percent category with the total amount charged at consummation. Do not apply the limit separately to each fee and assume the overall rule is satisfied. A change in one fee can be offset by another within the same applicable aggregate, subject to the regulation's calculation rules.

Classify before you calculate

1. Identify each charge and the service provider.
2. Determine whether the consumer could shop and whether the provider was selected from the written list.
3. Place the fee in the applicable zero-tolerance, 10-percent aggregate or no-tolerance category under 12 CFR 1026.19(e)(3).
4. Compare only the charges that belong in the same category.
5. Check for a valid changed circumstance or other permitted revision and any required corrected Loan Estimate timing.

Common mistakes

• Calling all third-party fees 'shoppable' without checking the provider-list rules.
• Treating the tolerance as 10% per fee instead of an aggregate.
• Including charges from another tolerance category in the total.
• Assuming a cost overrun is cured by relabeling it after closing.
• Ignoring the regulation's timing and changed-circumstance requirements.

Exam takeaway

The 10 percent tolerance is an aggregate for specified charges under stated shopping conditions. Read § 1026.19(e)(3), classify each charge first, then compare the correct totals and analyze any permitted revision.

The category is defined, not a blanket cushion

Regulation Z’s 10 percent tolerance applies to the aggregate of certain charges: recording fees and specified third-party service fees when the creditor permits the consumer to shop and the provider is not the creditor or its affiliate. A fee can rise by more than 10% individually if the covered aggregate remains within 10%. Do not apply a separate 10% limit to each fee.

Shopping and list status matter

When the creditor permits shopping and provides the required written list, fees for services the consumer does not shop for or providers chosen from the list generally enter the 10% aggregate category, subject to the rule. If the consumer chooses an unaffiliated provider not on the list after receiving the list, the fee is generally in the no-tolerance comparison category. If the creditor failed to provide a required list, the regulation has a specific rule that generally places an unaffiliated provider’s charge in the 10% category.

Affiliate fees are different

A charge paid to the creditor or its affiliate is generally subject to zero tolerance, even when the consumer was permitted to shop. The fee’s payee and affiliation can change the analysis. Do not classify a charge solely by the service name; determine who receives payment and what the consumer was allowed to select.

Worked aggregate example

The Loan Estimate shows $500 for title-related fees and $400 for recording fees, both in the applicable 10% bucket, for a total of $900. The 10% ceiling is $990. At closing, title fees rise to $560 and recording fees total $430, aggregate $990: exactly 10% higher. One line rose 12%, but the group remains at the cap. Confirm that each charge actually belongs in the category before using this arithmetic.

Revised estimates need a permitted reason

A changed circumstance, consumer-requested change, rate-lock event, or other listed reason may permit a revised Loan Estimate under Regulation Z, subject to timing and documentation. A new estimate cannot be issued just to cure an earlier under-disclosure. Compare actual fees with the correct baseline after determining whether a valid revision applies.

Calculation workflow

Classify each fee by tolerance category; identify provider and affiliate status; check whether shopping was permitted and whether a list was delivered; aggregate the 10% group; compare the total with the proper estimate; then evaluate any permitted revision and required cure.

List omission has a specific result

If the consumer was permitted to shop but the creditor failed to provide the required written list, CFPB’s commentary generally applies the 10% aggregate rule to an unaffiliated provider charge. A provider affiliated with the creditor is treated under the zero-tolerance rule. This is why the analysis must check both the omission and who receives the fee.

Provider chosen off-list after list delivered

When the creditor properly provides a list and the consumer selects an unaffiliated provider not on it, the charge is generally in the no-tolerance comparison category under §1026.19(e)(3)(iii). The creditor’s original estimate still must be based on the best information reasonably available. Do not confuse an off-list selection with a list that was never provided.

Additional compliance detail

The creditor can issue a revised estimate only for a reason permitted by §1026.19(e)(3)(iv), and the revision must meet timing and documentation rules. Keep both the original estimate and the valid revised baseline. A fee cannot be moved into another category merely because its actual amount exceeded the original estimate.