An application secured by a first lien on the applicant’s home is denied on 10 September. The appraisal had been completed on 1 September and never sent. Does the denial end the obligation?
Correct Answer
B) Provide valuation copies promptly or three business days before closing
Why this is correct: The appropriate correction is mandated by Regulation B (the governing federal rule When a first-lien appraisal is completed before closing, the creditor must ensure the applicant receives a copy of that appraisal promptly upon completion or no later than three business days before closing. A quality-control reviewer must ensure this corrective action is taken to remedy the flagged violation. Why the other choices are wrong: "Document that licensing and NMLS authority was reviewed, but take no required corrective action" is wrong because documenting an unrelated review does not correct the specific appraisal disclosure violation; the required action is to provide the copy. "Use an informal exception and leave the required record unchanged" is wrong because there is no "informal exception" to this federal rule; the record must reflect that the valuation was provided as required. "Let production goals override the required verification, disclosure, license, or record step" is wrong because compliance with federal disclosure rules like this one cannot be overridden by internal production pressures or goals. Exam tip: In quality control, a missing appraisal copy is a critical defect. The fix is always to provide it within the required timeframe.
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: Document that licensing and NMLS authority was reviewed, but take no required corrective action.
Document that licensing and NMLS authority was reviewed, but take no required corrective action. is not correct because it bypasses the rule supported by the explanation.
Option C: Use an informal exception and leave the required record unchanged.
Use an informal exception and leave the required record unchanged. is not correct because it bypasses the rule supported by the explanation.
Option D: Let production goals override the required verification, disclosure, license, or record step.
Let production goals override the required verification, disclosure, license, or record step. 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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Previous Question
A rush closing is scheduled four days after the valuation is completed. A manager says the three-business-day rule gives the team room to send it the day before consummation. Why is that the wrong reading?
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The APR on a file rises by half a percentage point the day before closing. A manager proposes closing on schedule and mailing a corrected disclosure afterwards. What is wrong with that plan?