A lender discovers that the APR disclosed on the Closing Disclosure is 0.20 percentage points higher than the actual APR. What action is required under TILA?
Correct Answer
C) Provide corrected disclosures but may proceed with closing immediately
Under TILA/Regulation Z Section 1026.22, when the disclosed APR is higher than the actual APR by more than 0.125 percentage points, corrected disclosures must be provided. However, since the disclosed APR overstates the actual cost to the borrower, there is no additional waiting period required before consummation.
Why This Is the Correct Answer
Under TILA/Regulation Z Section 1026.22, when the disclosed APR is higher than the actual APR by more than 0.125 percentage points, corrected disclosures must be provided. However, since the disclosed APR overstates the actual cost to the borrower, there is no additional waiting period required before consummation.
More Federal Laws Questions
A mortgage broker's website states 'Qualified borrowers can get loans with down payments as low as 3%.' Which statement about TILA advertising requirements is correct?
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?
A lender originates a mortgage that meets all QM requirements. Three years later, the borrower defaults and claims the lender violated the ATR rule. What legal protection does the lender have?
For a closed-end mortgage loan, when must the creditor provide the Closing Disclosure to the borrower?
Which of the following documents must be provided to trigger the start of the 3-day rescission period?
People Also Study
General Mortgage Knowledge
23% of exam
Mortgage Loan Origination Activities
25% of exam
Ethics, Fraud & Consumer Protection
17% of exam
Uniform State Test Content
12% of exam
Previous Question
An MLO receives a loan application from a same-sex married couple. Under federal fair housing law, the MLO must:
Next Question
A borrower with a conventional loan made a 10% down payment. Three years later, they complete a major home renovation that increases the property value by 25%. Can they immediately request PMI cancellation based on the increased property value?