A borrower-facing employee is unsure what to do when a first-lien appraisal is complete before closing. What is the correct response?
Correct Answer
C) Provide valuation copies promptly or three business days before closing
Why this is correct: Regulation B (ECOA) requires that for first-lien loans secured by a dwelling, the creditor must provide copies of all appraisals and written valuations to the applicant promptly upon completion, or at least three business days before closing, whichever is earlier. The correct answer directly follows this mandatory timing rule. Why the other choices are wrong: "Wait until after the staff training note to decide whether the disclosure, filing, or license issue matters" is wrong because the federal requirement is not optional and its timing is not dependent on internal training schedules. "Treat licensing and NMLS authority as satisfied by an oral manager approval" is wrong because this is a disclosure rule unrelated to MLO licensing; oral approval does not satisfy the requirement to deliver the document. "Treat prior mortgage experience as a substitute for the required compliance condition" is wrong because experience does not excuse following the specific regulatory procedure. Exam tip: For first-lien dwelling loans, provide the appraisal copy promptly or three business days before closing, whichever is earlier. This is a non-negotiable ECOA right.
Why This Is the Correct Answer
The correct response is "Provide valuation copies promptly or three business days before closing". Regulation B requires timely copies of appraisals and written valuations for covered first-lien dwelling applications.
Why the Other Options Are Wrong
Option A: Wait until after the staff training note to decide whether the disclosure, filing, or license issue matters.
Wait until after the staff training note to decide whether the disclosure, filing, or license issue matters. is not correct because it bypasses the rule supported by the explanation.
Option B: Treat licensing and NMLS authority as satisfied by an oral manager approval.
Treat licensing and NMLS authority as satisfied by an oral manager approval. is not correct because it bypasses the rule supported by the explanation.
Option D: Treat prior mortgage experience as a substitute for the required compliance condition.
Treat prior mortgage experience as a substitute for the required compliance condition. is not correct because it bypasses the rule supported by the explanation.
Memory Technique
Appraisal copy timing: promptly upon completion or three business days before closing.
Exam Tip
Appraisal copy timing: promptly upon completion or three business days before closing.
Common Mistakes to Avoid
- -The applicant request is not the trigger for the copy obligation in covered applications.
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