Mortgage Loan Originator (MLO) Licensing Practice Test

In the context of RESPA (Real Estate Settlement Procedures Act), an appraisal fee is categorized as a type of settlement service cost that is not subject to tolerances for changes. This means that there is no permissible variance or "tolerance" amount related to the disclosure of appraisal fees in the Loan Estimate provided to borrowers.

When the borrower receives the Loan Estimate, the appraisal fee must accurately reflect the cost that will be charged, as any change or variation from this amount can lead to compliance issues for lenders. Because it is a third-party service that the lender cannot control in terms of pricing, the requirement is that the borrower pays the exact fee disclosed. This commitment to clarity and accuracy helps protect consumers from unexpected charges and enhances overall transparency in the lending process.

In contrast, other fees might have a tolerance level that allows for a slight variation in pricing, but this does not apply to appraisal fees, which is why the specified tolerance is zero.