Which of the following represents a zero tolerance fee?

A zero tolerance fee refers to charges that cannot increase at the time of closing compared to what was initially disclosed to the borrower on the Loan Estimate. This regulation under Truth in Lending (Regulation Z) is designed to protect consumers from unexpected costs during the loan process.

Transfer taxes fit this definition because they are predetermined by local or state authorities and must be accurately disclosed to the borrower. Once quoted, these fees cannot increase, ensuring that consumers have a clear understanding of what they will owe at closing.

In contrast, fees for services the borrower compares can vary based on the final provider selected; thus, they do not have the same zero tolerance condition. Fees for a credit check may also change based on different factors, such as lender practices or credit reporting services employed. Loan application fees, while often set by the lender, can be influenced by the specific terms of the loan and might not fall under the zero tolerance rule, leading to different outcomes. Thus, transfer taxes are correctly identified as a zero tolerance fee, as they are fixed by external governing bodies and should not change.