A mortgage team asks a policy analyst about TILA advertising during an advertising approval. Which answer should guide the file?
Correct Answer
A) Remove misleading mortgage-advertising claims
Why this is correct: The original explanation states that mortgage advertisements must be truthful and include required disclosures. TILA and Regulation Z prohibit misleading claims in mortgage advertising. Therefore, removing misleading claims is the direct, compliant action to take during an advertising approval. Why the other choices are wrong: "Use an internal exception instead of the required federal disclosure or timing rule" is wrong because advertising rules are federal legal requirements, not optional internal guidelines. "Wait until a regulator asks for the file before applying the federal requirement" is wrong because ads must be compliant before they are published or broadcast. "Rely on oral agreement when the rule requires documented compliance" is wrong because advertising content itself must be clear, accurate, and contain any required written disclosures (like APR). Exam tip: If a mortgage ad mentions specific trigger terms (like a monthly payment amount), it must also disclose the APR, loan amount, and other terms as required by Regulation Z.
Why This Is the Correct Answer
The correct response is "Remove misleading mortgage-advertising claims" because Mortgage advertisements must be truthful and include required APR or trigger-term disclosures.
Why the Other Options Are Wrong
Option B: Use an internal exception instead of the required federal disclosure or timing rule.
Use an internal exception instead of the required federal disclosure or timing rule. is not correct because it does not apply the rule tested by this file scenario.
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
TILA advertising: 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 TILA advertising; 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
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