A creditor discovers that a loan initially classified as non-HPML actually qualifies as an HPML due to a calculation error discovered 45 days after consummation. What action is required?
Correct Answer
A) Immediately establish an escrow account and provide required disclosures
Under TILA Section 1026.35, if a loan is determined to be an HPML after consummation due to creditor error, the creditor must comply with all HPML requirements going forward, including establishing escrow accounts and providing any required notices, regardless of when the error is discovered.
Why This Is the Correct Answer
Under TILA Section 1026.35, if a loan is determined to be an HPML after consummation due to creditor error, the creditor must comply with all HPML requirements going forward, including establishing escrow accounts and providing any required notices, regardless of when the error is discovered.
More Federal Laws Questions
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A loan's APR increases from 4.25% on the Loan Estimate to 4.35% on the Closing Disclosure due to a rate lock expiration. What action is required?
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