An MLO sponsorship update raises a question about TRID Closing Disclosure timing. Which action should the loan file reviewer recommend?
Correct Answer
B) Delay consummation until the corrected disclosure timing is met
Why this is correct: Under TRID (Regulation Z), the borrower must receive the Closing Disclosure at least three business days before consummation (closing). If a correction is needed that requires a new disclosure, the timing rule resets. Therefore, the proper action is to "Delay consummation until the corrected disclosure timing is met" to ensure the borrower has the mandated review period. Why the other choices are wrong: "Apply the correct general concept to the wrong rate-lock stage rather than the TILA Closing Disclosure rule" is wrong because rate-lock timing is separate from the mandatory Closing Disclosure receipt period. "Wait until a regulator asks for the file before applying the federal requirement" is wrong because the timing rule must be met before closing; waiting is a violation. "Rely on oral agreement when the rule requires documented compliance" is wrong because TRID timing requires actual receipt of the written disclosure; oral agreements do not satisfy this. Exam tip: Remember the core TRID timing rule: Closing Disclosure must be received 3 business days before consummation. If it's not, delay closing.
Why This Is the Correct Answer
The correct response is "Delay consummation until the corrected disclosure timing is met" because The Closing Disclosure must be received in time and corrected under Regulation Z rules.
Why the Other Options Are Wrong
Option A: Apply the correct general concept to the wrong rate-lock stage rather than the TILA Closing Disclosure rule.
This distractor shifts the issue to a different trigger, product, or timing rule instead of applying the rule tested in the stem.
Option C: Wait until a regulator asks for the file before applying the federal requirement.
Wait until a regulator asks for the file before applying the federal requirement. is not correct because it does not apply the rule tested by this file scenario.
Option D: Rely on oral agreement when the rule requires documented compliance.
Rely on oral agreement when the rule requires documented compliance. is not correct because it does not apply the rule tested by this file scenario.
Memory Technique
TRID Closing Disclosure timing: identify the rule being tested, then choose the action that documents or applies that rule before the file moves forward.
Exam Tip
Match the file facts to TRID Closing Disclosure timing; do not choose an exception or shortcut that skips the required rule.
Common Mistakes to Avoid
- -Choosing an internal exception instead of the governing rule
- -Treating preliminary or informal facts as a substitute for required documentation
- -Answering from a familiar but unrelated mortgage topic
More Federal Laws Questions
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Before the team acts on a production meeting, a training manager must address SCRA Interest Rate Cap. Which response is most defensible?
Before the team acts on a production meeting, the MLO must address FCRA Adverse Action Notice. Which response is most defensible?
A team member asks about RESPA Kickbacks and Referrals in an investor-delivery review while trying to confirm the rule-based response. Which response should the loan team use?
During a disclosure desk review, the loan team encounters an RESPA Servicing Transfer issue. Which response should avoid a shortcut that would misapply the rule?
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An MLO is reviewing procedures for a case where a compliance analyst asks why covered mortgage application data is collected. What is the proper handling?
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