A covered servicer receives a loss mitigation application 51 days before a scheduled foreclosure sale. Three required documents within the borrower's control are missing. Assuming the acknowledgment requirements apply, what must the servicer send after receipt?
Correct Answer
C) Acknowledge within 5 days excluding weekends and legal public holidays, identifying missing items and a reasonable deadline
C. Send the timely written acknowledgment identifying the missing items and reasonable completion date. Fifty-one days meets the at-least-45-day acknowledgment threshold. The five-day clock excludes Saturdays, Sundays and legal public holidays; incompleteness does not remove the duty. Scope and exceptions: Review completeness promptly and exercise reasonable diligence. The notice also advises considering contact with other mortgage servicers on the property. Missing information outside the borrower's control has different completeness treatment. Acknowledgment is not approval of assistance. Source: Section 1024.41(b)(1)–(2); comment 41(b)(1)-5 — https://www.consumerfinance.gov/rules-policy/regulations/1024/41/
Why This Is the Correct Answer
C. Send the timely written acknowledgment identifying the missing items and reasonable completion date. Fifty-one days meets the at-least-45-day acknowledgment threshold. The five-day clock excludes Saturdays, Sundays and legal public holidays; incompleteness does not remove the duty. Scope and exceptions: Review completeness promptly and exercise reasonable diligence. The notice also advises considering contact with other mortgage servicers on the property. Missing information outside the borrower's control has different completeness treatment. Acknowledgment is not approval of assistance.
Why the Other Options Are Wrong
Option A: Deny immediately because incomplete applications are never acknowledged
Missing documents do not justify skipping acknowledgment.
Option B: Do nothing because 51 days is inside the 45-day window
Fifty-one is greater than 45, not inside a less-than-45-day interval.
Option D: Wait 30 days to acknowledge because the application is incomplete
Thirty days is not this acknowledgment deadline.
Exam Tip
Separate receipt acknowledgment, completeness and substantive evaluation.
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