This is from the GFE instructions on HUD website. It states required and selected. I think that's what the examiner was using. He was probably stretching the interpretation. Thanks for the input.
Block 3, ``Required services that we select.''--In this block, the
loan originator must identify each third party settlement service
required and selected by the loan originator (excluding title services),
along with the estimated price to be paid to the provider of each
service. Examples of such third party settlement services might include
provision of credit reports, appraisals, flood checks, tax services, and
any upfront mortgage insurance premium. The loan originator must
identify the specific required services and provide an estimate of the
price of each service. Loan originators are also required to add the
individual charges disclosed in this block and place that total in the
column of this block. The charge shown in this block is subject to an
overall 10 percent tolerance as described above.