Which disclosure shows the consumer the final itemized loan costs and other costs for a covered closed-end real-estate mortgage?
Correct Answer
A) The Closing Disclosure
Why this is correct: The Closing Disclosure (CD), mandated by TRID, is the specific form designed to provide the consumer with the final, itemized breakdown of all loan costs (like origination charges), other costs (like taxes and insurance), calculating the final cash to close. It is the definitive pre-consummation disclosure for covered closed-end mortgage loans. Why the other choices are wrong: The choice "The NMLS Consumer Access record" is wrong because this is a public website for verifying an MLO's license status, not a transaction-specific disclosure of loan costs. The choice "The initial escrow statement only" is wrong because while an initial escrow statement may be provided, it does not show all loan costs; the CD is the comprehensive document. The choice "The adverse action notice" is wrong because this notice is given when a loan application is denied, not to disclose final costs for an approved, closing loan. Exam tip: The Closing Disclosure is the final cost disclosure. Remember its purpose: to allow the consumer to compare the final terms and costs to those on the earlier Loan Estimate.
Why This Is the Correct Answer
Why this is correct: The Closing Disclosure (CD), mandated by TRID, is the specific form designed to provide the consumer with the final, itemized breakdown of all loan costs (like origination charges), other costs (like taxes and insurance), calculating the final cash to close. It is the definitive pre-consummation disclosure for covered closed-end mortgage loans. Why the other choices are wrong: The choice "The NMLS Consumer Access record" is wrong because this is a public website for verifying an MLO's license status, not a transaction-specific disclosure of loan costs. The choice "The initial escrow statement only" is wrong because while an initial escrow statement may be provided, it does not show all loan costs; the CD is the comprehensive document. The choice "The adverse action notice" is wrong because this notice is given when a loan application is denied, not to disclose final costs for an approved, closing loan. Exam tip: The Closing Disclosure is the final cost disclosure. Remember its purpose: to allow the consumer to compare the final terms and costs to those on the earlier Loan Estimate.
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?
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