A bank receives an application for a consumer-purpose, closed-end loan secured by real property. The transaction is not a reverse mortgage or another excluded loan. Which disclosure framework generally applies?
Correct Answer
A) The TRID Loan Estimate and Closing Disclosure framework
Why this is correct: The TILA-RESPA Integrated Disclosure (TRID) rule applies to most closed-end consumer mortgage loans secured by real property. The Loan Estimate and Closing Disclosure are the required integrated disclosures for such covered transactions. Why the other choices are wrong: 'Credit-card account-opening disclosures' are for open-end credit, not closed-end mortgages. 'Only an NMLS license-renewal notice' is wrong; that pertains to MLO licensing, not federal consumer loan disclosures. 'No federal mortgage disclosures because the property already exists' is wrong; the existence of the property does not exempt the loan from disclosure requirements. Exam tip: TRID's Loan Estimate/Closing Disclosure framework is the default for closed-end, consumer-purpose, real-estate-secured loans. Think 'TRID' unless the loan is specifically excluded (e.g., reverse mortgage, HELOC, or certain small loans).
Why This Is the Correct Answer
Why this is correct: The TILA-RESPA Integrated Disclosure (TRID) rule applies to most closed-end consumer mortgage loans secured by real property. The Loan Estimate and Closing Disclosure are the required integrated disclosures for such covered transactions. Why the other choices are wrong: 'Credit-card account-opening disclosures' are for open-end credit, not closed-end mortgages. 'Only an NMLS license-renewal notice' is wrong; that pertains to MLO licensing, not federal consumer loan disclosures. 'No federal mortgage disclosures because the property already exists' is wrong; the existence of the property does not exempt the loan from disclosure requirements. Exam tip: TRID's Loan Estimate/Closing Disclosure framework is the default for closed-end, consumer-purpose, real-estate-secured loans. Think 'TRID' unless the loan is specifically excluded (e.g., reverse mortgage, HELOC, or certain small loans).
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