A mortgage file is paused during a policy refresh meeting because of SCRA Military Protections. Which answer should match the file facts to the correct rule?
Correct Answer
C) Apply SCRA protections for eligible active-duty service
Why this is correct: The Servicemembers Civil Relief Act (SCRA) provides legal protections (like interest rate caps, stay of proceedings, and foreclosure safeguards) specifically for eligible active-duty servicemembers. The first step in compliance is to correctly identify if the borrower is eligible for SCRA protections based on their active-duty military status. The file facts must be matched to this rule. The correct answer is to "Apply SCRA protections for eligible active-duty service." Why the other choices are wrong: "Use an internal exception instead of the required federal disclosure or timing rule" is wrong because SCRA is a federal statute; its protections cannot be overridden by an internal policy exception. "Wait until a regulator asks for the file before applying the federal requirement" is wrong because SCRA protections are triggered when the servicemember's status is known and must be applied immediately, not upon inquiry. "Rely on oral agreement when the rule requires documented compliance" is wrong because SCRA eligibility and benefits often require written documentation, such as military orders. Exam tip: SCRA applies to obligations incurred before active duty. The core test is eligibility based on active-duty status. Always check for this first.
Why This Is the Correct Answer
The correct response is "Apply SCRA protections for eligible active-duty service" because SCRA protects eligible servicemembers on covered obligations and foreclosure actions.
Why the Other Options Are Wrong
Option A: 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 B: 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
SCRA borrower protections: 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 SCRA borrower protections; 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
More Federal Laws Questions
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Before the team acts on a production meeting, a training manager must address SCRA Interest Rate Cap. Which response is most defensible?
Before the team acts on a production meeting, the MLO must address FCRA Adverse Action Notice. Which response is most defensible?
A team member asks about RESPA Kickbacks and Referrals in an investor-delivery review while trying to confirm the rule-based response. Which response should the loan team use?
During a disclosure desk review, the loan team encounters an RESPA Servicing Transfer issue. Which response should avoid a shortcut that would misapply the rule?
A mortgage team asks a quality-control reviewer about TRID Loan Estimate timing during a record-retention audit. Which answer should guide the file?
A mortgage team asks a branch supervisor about TILA APR and finance-charge rules during a renewal checklist. Which answer should guide the file?
A mortgage file is paused during a risk-control review because of TILA QM DTI Calculation. Which answer should choose the most defensible file action?
A disciplinary-risk review raises a question about TILA APR and finance-charge rules. Which action should the renewal specialist recommend?
An MLO is reviewing procedures for a case where a compliance analyst asks why covered mortgage application data is collected. What is the proper handling?
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