True or False: Charges subject to the 10% tolerance include recording fees and charges for third-party services when the consumer is permitted to shop.

The correct answer is true because under the Truth in Lending Act (Regulation Z), the 10% tolerance applies specifically to certain fees associated with the closing costs of a mortgage loan, including both recording fees and third-party service charges when the borrower is allowed to shop for these services.

When borrowers are permitted to shop for third-party services, lenders are obligated to provide a good faith estimate (GFE) of costs, and the actual charges for these services must fall within 10% of the estimated amounts provided on the GFE. This requirement ensures that consumers can accurately budget for their closing costs and are protected from unexpected expenses.

In contrast, if the charges are not subject to shopping—such as certain lender fees or other costs explicitly noted in the regulation—then they would not be included in the 10% tolerance category. By including both recording fees and charges for third-party services when shopping is allowed, the regulation helps maintain transparency and protect consumer interests during the mortgage lending process.