Before the team acts on a servicing handoff check, a licensing coordinator must address TILA Closing Disclosure. Which response is most defensible?
Correct Answer
C) Restart the wait only for APR, product, or prepayment-penalty triggers
Why this is correct: TRID/Regulation Z rules require that the Closing Disclosure be provided to the consumer at least three business days before consummation. If a change occurs that requires a new disclosure (a "valid change"), the waiting period may restart, but only for specific changes: an increase in the APR, a change in loan product, or the addition of a prepayment penalty. The correct answer, "Restart the wait only for APR, product, or prepayment-penalty triggers," accurately reflects this rule. Why the other choices are wrong: "Apply the correct general concept to the wrong SAFE Act testing stage rather than the TILA Closing Disclosure rule" is wrong because the SAFE Act deals with MLO licensing, not TILA disclosure timing. "Wait until a regulator asks for the file before applying the federal requirement" is wrong because the timing rule is mandatory pre-consummation. "Rely on oral agreement when the rule requires documented compliance" is wrong because the Closing Disclosure must be provided in writing. Exam tip: The three-day waiting period only restarts for those three specific changes (APR increase, product change, prepayment penalty added). Other changes may require a corrected disclosure but do not restart the waiting period.
Why This Is the Correct Answer
The correct response is "Restart the wait only for APR, product, or prepayment-penalty triggers" because The Closing Disclosure must be received in time and corrected under Regulation Z rules.
Why the Other Options Are Wrong
Option A: Apply the correct general concept to the wrong SAFE Act testing stage rather than the TILA Closing Disclosure rule.
This distractor shifts the issue to a different trigger, product, or timing rule instead of applying the rule tested in the stem.
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
TRID Closing Disclosure timing: 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 TRID Closing Disclosure timing; 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
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