Of these settlement charges, which is allowed to show a 10% tolerance between the loan estimate and the actual charge at closing?

The correct choice relates to government recording charges, which indeed have a 10% tolerance requirement under the regulations established by the Real Estate Settlement Procedures Act (RESPA). This means that when borrowers receive a loan estimate, the final charges they encounter at closing can vary from what was initially estimated but only by a maximum of 10%.

Government recording charges are typically associated with the official registration of the property transaction, including filing the deed and mortgage documents. Since these fees might fluctuate slightly due to varying local tax rates or small administrative adjustments, the 10% tolerance allows for some flexibility in protecting consumers from unexpected costs while also ensuring that lenders provide accurate estimates as closely as possible.

In contrast, other charges such as origination fees and charges for the interest rate locked are subject to stricter tolerances (usually requiring them to match the loan estimate exactly, without any variation). Transfer taxes may also not fall under the 10% tolerance rule depending on jurisdiction and the specifics of the transaction, leading to potential discrepancies that do not afford the same lenient allowance as government recording charges. Understanding these distinctions is key in navigating settlement charges effectively and ensuring compliance with regulatory standards.