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
More Federal Laws Questions
A mortgage file is paused during a lock-desk handoff because of FCRA Adverse Action Notices. Which answer should identify which rule controls the file?
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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