Before closing, the team discovers that a first-lien appraisal is complete before closing. What is the safest compliant answer?
Correct Answer
B) Provide valuation copies promptly or three business days before closing
Why this is correct: Under Regulation B (ECOA) 12 CFR 1002.14, for a first-lien dwelling-secured loan, the creditor must provide the applicant with a copy of any appraisal or written valuation. The required timing is 'promptly' after it is completed or three business days before closing, whichever date is earlier. Since the appraisal is complete before closing, this rule is immediately applicable. Why the other choices are wrong: "Use an internal exception instead of the required federal disclosure or timing rule" is incorrect because federal rules supersede internal exceptions. "Apply the correct general concept to the wrong credit underwriting stage rather than the ECOA appraisal and valuation copies rule" is wrong because it admits to misapplying a concept; the facts directly call for the specific ECOA valuation rule. "Rely on oral agreement when the rule requires documented compliance" is wrong because the rule requires the physical/electronic provision of the document; an oral agreement does not fulfill this. Exam tip: The key phrase is 'promptly or three days before closing.' If the appraisal is done, you must provide it promptly. Don't wait for the three-day pre-closing mark if that is later.
Why This Is the Correct Answer
The correct response is "Provide valuation copies promptly or three business days before closing" because Lines 42-54; 12 CFR 1002.14(a)(1).
Why the Other Options Are Wrong
Option A: 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: Apply the correct general concept to the wrong credit underwriting stage rather than the ECOA appraisal and valuation copies rule.
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
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