A quality-control reviewer flags a case because the consumer locks the interest rate after the initial disclosure package. What correction is appropriate?
Correct Answer
D) Send the revised Loan Estimate within three business days
Why this is correct: The appropriate correction is mandated by 12 CFR 1026.19(e)(3)(iv)(D). A rate lock after the initial disclosure that requires a revision to the Loan Estimate triggers a three-business-day deadline to provide the revised estimate. This is the core compliance fix for the flagged issue. Why the other choices are wrong: "Apply the SAFE Act testing timing rule even though the file is testing Rate lock revised Loan Estimate timing" is wrong because the SAFE Act deals with licensing, not TRID disclosure timing; applying the wrong rule is non-compliant. "Assume the borrower accepted lock changes because the payment is lower" is wrong because borrower acceptance does not replace the lender's affirmative duty to provide proper written disclosures. "Change locked terms without documenting the lock agreement and borrower authorization" is wrong because it violates both disclosure and record-keeping requirements. Exam tip: In quality control, the correction must directly address the specific violation. Here, the violation is a missed revised Loan Estimate; the fix is to send it within the required timeframe.
Why This Is the Correct Answer
The correct response is "Send the revised Loan Estimate within three business days". A rate lock requiring revision carries a three business day redisclosure deadline.
Why the Other Options Are Wrong
Option A: Apply the SAFE Act testing timing rule even though the file is testing Rate lock revised Loan Estimate timing.
This distractor shifts the issue to a different trigger, product, or timing rule instead of applying the rule tested in the stem.
Option B: Assume the borrower accepted lock changes because the payment is lower.
This choice is not the best answer because it applies the wrong file step for rate-lock documentation; the governing rule is tested by the correct option.
Option C: Change locked terms without documenting the lock agreement and borrower authorization.
This choice is a tempting shortcut, but it conflicts with rate-lock documentation because the file still needs the required documentation, timing, or rule-based review before the action is taken.
Memory Technique
Rate lock plus revised LE equals three business days.
Exam Tip
For rate-lock documentation questions, separate the required file step from plausible sales, timing, or documentation shortcuts.
Common Mistakes to Avoid
- -Borrower-requested rate locks can still require revised written disclosure.
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