On the morning of closing a federally related mortgage loan, an originator discovers an omitted affiliated-business disclosure for a title agency he owns 30% of. The applicable disclosure deadline passed six weeks ago. What should he do now?
Correct Answer
A) Provide the disclosure promptly, document the omission and escalate it for compliance review
A. Address and escalate the omission rather than conceal it. Late delivery does not make the original deadline timely. Compliance review should assess the missed requirement and any applicable bona fide error provision, rather than assume a last-minute form automatically cures the issue. Scope and exceptions: Section 1024.15(b)(1) contains timing exceptions and a limited bona fide error provision requiring evidence of reasonable compliance procedures. This question stipulates a missed applicable deadline; it does not determine liability or authorize closing. Source: Section 1024.15(b)(1), including (i)–(iii) — https://www.consumerfinance.gov/rules-policy/regulations/1024/15/
Why This Is the Correct Answer
A. Address and escalate the omission rather than conceal it. Late delivery does not make the original deadline timely. Compliance review should assess the missed requirement and any applicable bona fide error provision, rather than assume a last-minute form automatically cures the issue. Scope and exceptions: Section 1024.15(b)(1) contains timing exceptions and a limited bona fide error provision requiring evidence of reasonable compliance procedures. This question stipulates a missed applicable deadline; it does not determine liability or authorize closing.
Why the Other Options Are Wrong
Option B: Ignore the omission because a 30% ownership interest cannot create an affiliation
The ownership percentage is not a basis to ignore this stipulated affiliated arrangement.
Option C: Say nothing: the closing is in progress and disclosure would derail it
Protecting the closing schedule does not justify concealment.
Option D: Disclose only if the buyer asks who owns the title agency
Required disclosure does not depend on the buyer asking.
Exam Tip
Correct an omission transparently; do not equate correction with automatic cure.
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