A mortgage file is paused during a lock-desk handoff because of ECOA Age Discrimination. Which answer should avoid a shortcut that would misapply the rule?
Correct Answer
A) Send the required adverse-action notice
Why this is correct: The Equal Credit Opportunity Act (ECOA), under Regulation B, prohibits discrimination based on age, among other factors. If a credit decision is adverse (e.g., denial), a specific adverse action notice with reasons must be sent to the applicant. The correct choice mandates this required notice. Why the other choices are wrong: Using an internal exception is illegal; ECOA's anti-discrimination rules are absolute. Using the TRID timing standard is irrelevant; ECOA discrimination analysis is based on prohibited bases, not disclosure timing. Relying on an oral agreement is non-compliant; ECOA requires written adverse action notices. Exam tip: For ECOA, know the prohibited bases: race, color, religion, national origin, sex, marital status, age, income source, and exercise of rights under consumer credit laws.
Why This Is the Correct Answer
The correct response is "Send the required adverse-action notice" because ECOA/Regulation B prohibits discrimination and requires action notices and valuation copies.
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: Use the TRID timing standard to decide the ECOA Age Discrimination issue before confirming the trigger facts.
This distractor shifts the issue to a different trigger, product, or timing rule instead of applying the rule tested in the stem.
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
ECOA and Regulation B: 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 ECOA and Regulation B; 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?
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