During intake, a closing is approaching and the borrower has not yet received the Closing Disclosure. What is the best compliant response?
Correct Answer
A) Ensure receipt three business days before consummation
Why this is correct: The governing concept is the mandatory waiting period between providing the Closing Disclosure and consummation (closing). Under 12 CFR 1026.19(f)(1)(ii), the consumer must receive the Closing Disclosure no later than three business days before consummation. This waiting period is mandatory to give the borrower time to review the final terms. Why the other choices are wrong: "Leave the Loan Estimate unchanged after the creditor learns the disclosed charge is inaccurate" is wrong because if a charge becomes inaccurate, the creditor generally must issue a revised Loan Estimate or corrected Closing Disclosure, depending on the timing. "Cure a tolerance problem by renaming the fee instead of documenting or refunding the variance" is wrong because renaming a fee does not cure a tolerance violation; proper cures involve refunding the excess or documenting a valid changed circumstance. "Move the fee to a different category to avoid a tolerance cure" is wrong because moving a fee does not change its nature or the applicable tolerance category; this is not a compliant practice. Exam tip: The 3-business-day receipt rule for the Closing Disclosure is a hard deadline. Plan closings accordingly.
Why This Is the Correct Answer
The correct response is "Ensure receipt three business days before consummation" because Lines 205-206; 12 CFR 1026.19(f)(1)(ii).
Why the Other Options Are Wrong
Option B: Leave the Loan Estimate unchanged after the creditor learns the disclosed charge is inaccurate.
This choice is not the best answer because it applies the wrong file step for fee disclosure and tolerance treatment; the governing rule is tested by the correct option.
Option C: Cure a tolerance problem by renaming the fee instead of documenting or refunding the variance.
This choice is a tempting shortcut, but it conflicts with fee disclosure and tolerance treatment because the file still needs the required documentation, timing, or rule-based review before the action is taken.
Option D: Move the fee to a different category to avoid a tolerance cure.
This choice is not the best answer because it applies the wrong file step for fee disclosure and tolerance treatment; the governing rule is tested by the correct option.
Memory Technique
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
For fee disclosure and tolerance treatment questions, separate the required file step from plausible sales, timing, or documentation shortcuts.
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
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During a training quiz scenario, the loan team encounters an Income Calculation issue. Which response should resolve the issue before the file moves forward?
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