For a mortgage subject to the Loan Estimate rule, the creditor receives five of the six application items on June 2 and the final item, estimated property value, on Friday, June 6. Its offices are open to the public for substantially all business functions Monday through Friday only, with no intervening holiday. Was mailing the Loan Estimate on Tuesday, June 10 timely under the three-business-day application deadline?
Correct Answer
B) Yes: Tuesday, June 10 is before the Wednesday, June 11 deadline
B. Mailing on Tuesday is timely under the specified deadline. Receipt of the sixth application item on Friday triggers this clock. Monday, June 9 is day one; Tuesday, June 10 is day two; Wednesday, June 11 is day three. Scope and exceptions: This answers the application-based deadline only. The separate pre-consummation waiting rule still applies. Other laws may define an application differently; five items do not mean that no legal duties of any kind can arise. Source: Section 1026.2(a)(3)(ii), (a)(6) — https://www.consumerfinance.gov/rules-policy/regulations/1026/2/ Section 1026.19(e)(1)(iii)(A)–(B) — https://www.consumerfinance.gov/rules-policy/regulations/1026/19/
Why This Is the Correct Answer
B. Mailing on Tuesday is timely under the specified deadline. Receipt of the sixth application item on Friday triggers this clock. Monday, June 9 is day one; Tuesday, June 10 is day two; Wednesday, June 11 is day three. Scope and exceptions: This answers the application-based deadline only. The separate pre-consummation waiting rule still applies. Other laws may define an application differently; five items do not mean that no legal duties of any kind can arise.
Why the Other Options Are Wrong
Option A: Late: the loan estimate was due within 2 business days of 6 June
The deadline is three business days after receipt, not two.
Option C: Yes: no disclosure deadline applies until every underwriting document is submitted
Additional underwriting documents are not needed to trigger this disclosure duty.
Option D: Late: the clock started on 2 June when the first items arrived
The six-item application was not received on June 2.
Exam Tip
Identify the triggering receipt date, then count subsequent qualifying business days.
More Origination Questions
Before the team acts on a servicing handoff check, a closing coordinator must address Asset Verification and Reserves. Which response is most defensible?
An MLO is reviewing procedures for a case where a cost changes after the Closing Disclosure has already been provided. What is the proper handling?
During a post-application update, a quality-control reviewer encounters a Credit Analysis and Evaluation issue. Which response should avoid a shortcut that would misapply the rule?
A construction-to-permanent loan will disburse in 5 draws over 11 months before the permanent phase begins. Which Regulation Z appendix provides a disclosure method for multiple-advance construction transactions?
Before closing, the team discovers that a borrower asks which upfront charge can be collected before intent to proceed. What is the safest compliant answer?
A construction loan agreement allows advances only after documented completion of specified work. A builder requests the next draw, but no completion evidence has been provided. What should occur?
Before releasing the final construction draw, which combination most directly supports project completion and clear collateral?
A construction-to-permanent loan will convert to a substantially higher fully amortizing payment. Which payment is especially important when assessing the borrower's long-term repayment capacity?
A construction-to-permanent note states that conversion requires completion, a certificate of occupancy, and no unresolved liens. Construction is finished, but a mechanic's lien remains. What should happen?
A branch manager asks about a loan file because a processor wants to omit known monthly obligations from underwriting. What should happen?
People Also Study
Federal Mortgage-Related Laws
24% of exam
General Mortgage Knowledge
20% of exam
Ethics, Fraud & Consumer Protection
18% of exam
Uniform State Test Content
11% of exam
Related Study Resources
Previous Question
A file is priced with two discount points at the borrower’s request. The originator’s commission is calculated on the total of the points and the rate rather than on the amount financed. What is wrong with the calculation?
Next Question
A disclosure specialist is resolving Income Calculation Methods during an internal audit sample. Which action best fits the rule?