In a purchase transaction, the seller agrees to pay $3,000 in buyer's closing costs after the Closing Disclosure has been provided. This change occurs 2 days before closing. What is required?
Correct Answer
C) Issue a revised Closing Disclosure but closing can proceed as scheduled
Under TRID (12 CFR 1026.19(f)(2)(v)), if seller-paid closing costs increase (which effectively reduces the borrower's costs), this does not trigger a new 3-business-day waiting period. However, a revised Closing Disclosure must still be issued to reflect the change, but closing can proceed as scheduled.
Why This Is the Correct Answer
Under TRID (12 CFR 1026.19(f)(2)(v)), if seller-paid closing costs increase (which effectively reduces the borrower's costs), this does not trigger a new 3-business-day waiting period. However, a revised Closing Disclosure must still be issued to reflect the change, but closing can proceed as scheduled.
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
Previous Question
Under the anti-steering rule, if a borrower qualifies for a 15-year fixed rate loan at 5.5%, a 30-year fixed rate loan at 6.0%, and a 30-year interest-only loan at 5.0%, which loan satisfies the 'lowest rate without risky features' requirement?
Next Question
A borrower has a conventional loan with PMI that was originated in 1995. When must the lender terminate the PMI under the HPA?