A lender discovers that the property taxes used in the initial Loan Estimate were understated by $150 per month. This discovery is made 15 days after the Loan Estimate was provided. What action is required?
Correct Answer
D) Provide a changed circumstances notice and revised Loan Estimate
Under TRID (12 CFR 1026.19(e)(3)(iv)), when a lender discovers information that affects the accuracy of the Loan Estimate (such as incorrect property tax amounts), this constitutes a changed circumstance. The lender must provide a changed circumstances notice and may issue a revised Loan Estimate, even though property taxes are not subject to tolerance limitations.
Why This Is the Correct Answer
Under TRID (12 CFR 1026.19(e)(3)(iv)), when a lender discovers information that affects the accuracy of the Loan Estimate (such as incorrect property tax amounts), this constitutes a changed circumstance. The lender must provide a changed circumstances notice and may issue a revised Loan Estimate, even though property taxes are not subject to tolerance limitations.
More Origination Questions
A borrower has a construction-to-permanent loan with a 12-month construction phase. At month 10, construction is only 60% complete due to delays. What is the most likely outcome?
For a construction-to-permanent loan, when must the initial Closing Disclosure be provided for the construction phase?
During a refinance transaction, the appraiser determines that significant unpermitted additions were made to the property. The appraiser wants to discuss this with the MLO before finalizing the report. What should the MLO do?
An appraiser discovers that a property has significant foundation issues that were not disclosed. The appraiser reduces the property value by $25,000 and includes detailed comments about the structural problems. The loan officer is upset because this will kill the deal. Under AIR, the loan officer:
An MLO's compensation structure includes higher payments for certain loan products. When is it acceptable to recommend these higher-compensated products?
People Also Study
Federal Mortgage-Related Laws
23% of exam
General Mortgage Knowledge
23% of exam
Ethics, Fraud & Consumer Protection
17% of exam
Uniform State Test Content
12% of exam