During a disclosure desk review, a risk reviewer encounters a TILA TRID Loan Estimates issue. Which response should resolve the issue before the file moves forward?
Correct Answer
D) Issue a revised Loan Estimate within three business days when valid
Why this is correct: Under TILA-RESPA Integrated Disclosure (TRID) rules, a revised Loan Estimate can be issued only for specific, valid reasons (like a changed circumstance) and must be provided to the consumer within three business days of receiving information sufficient to establish that reason. The correct answer, "Issue a revised Loan Estimate within three business days when valid," correctly states both the condition (a valid reason) and the timing requirement. Why the other choices are wrong: "Redisclose only after consummation because the file already has a Closing Disclosure" is wrong because if a valid changed circumstance occurs before closing, a revised LE may be required; waiting until after consummation is too late. "Use a revised disclosure to reset tolerances without a documented event" is wrong because you cannot issue a revised LE solely to reset tolerances; a valid triggering event is required. "Treat a rate lock as a changed circumstance for unrelated settlement fees" is wrong because a rate lock is a changed circumstance only for fees affected by the lock (like points); it does not permit resetting unrelated fees. Exam tip: The three-day deadline for issuing a revised LE is a key timing rule. The validity of the reason (the "changed circumstance") is just as important as the timing.
Why This Is the Correct Answer
The correct response is "Issue a revised Loan Estimate within three business days when valid" because Changed circumstances can permit revised estimates only when Regulation Z conditions and timing are met.
Why the Other Options Are Wrong
Option A: Redisclose only after consummation because the file already has a Closing Disclosure.
This choice is a tempting shortcut, but it conflicts with changed-circumstance documentation because the file still needs the required documentation, timing, or rule-based review before the action is taken.
Option B: Use a revised disclosure to reset tolerances without a documented event.
This choice is a tempting shortcut, but it conflicts with changed-circumstance documentation because the file still needs the required documentation, timing, or rule-based review before the action is taken.
Option C: Treat a rate lock as a changed circumstance for unrelated settlement fees.
This choice is not the best answer because it applies the wrong file step for changed-circumstance documentation; the governing rule is tested by the correct option.
Memory Technique
changed-circumstance review: identify the rule being tested, then choose the action that documents or applies that rule before the file moves forward.
Exam Tip
For changed-circumstance documentation 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
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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