Before the team acts on a servicing handoff check, the loan team must address TRID Loan Estimate. Which response is most defensible?
Correct Answer
D) Include covered originator compensation when required
Why this is correct: Under TRID, the Loan Estimate must include an accurate disclosure of loan costs. Covered originator compensation (like commissions or broker fees) is part of the points and fees calculation, which can affect whether a loan is a Qualified Mortgage (QM) or a High-Cost Mortgage (HOEPA). Including it when required ensures the Loan Estimate is accurate and defensible. Why the other choices are wrong: "Apply a different loan-program rule without checking the file facts." is wrong because it suggests using a non-TRID rule for a TRID disclosure. "Ignore product, occupancy, LTV, or eligibility limits because the borrower prefers the loan." is wrong because TRID disclosure requirements are legal mandates, not subject to borrower preference. "Use the same treatment for all mortgage products without comparing program requirements." is wrong because while TRID applies broadly, the calculation of points and fees (which includes compensation) can vary by product. Exam tip: Originator compensation is a key component of 'points and fees' for QM and HOEPA tests. It must be on the Loan Estimate.
Why This Is the Correct Answer
The correct response is "Include covered originator compensation when required" because Points and fees can affect APR, HOEPA, QM, and borrower cost calculations.
Why the Other Options Are Wrong
Option A: Apply a different loan-program rule without checking the file facts.
Apply a different loan-program rule without checking the file facts. is not correct because it does not apply the rule tested by this file scenario.
Option B: Ignore product, occupancy, LTV, or eligibility limits because the borrower prefers the loan.
Ignore product, occupancy, LTV, or eligibility limits because the borrower prefers the loan. is not correct because it does not apply the rule tested by this file scenario.
Option C: Use the same treatment for all mortgage products without comparing program requirements.
Use the same treatment for all mortgage products without comparing program requirements. is not correct because it does not apply the rule tested by this file scenario.
Memory Technique
points and fee calculations: 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 points and fee calculations; 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 Mortgage Knowledge Questions
A self-employed borrower's eligible business income, after all required underwriting adjustments, is $72,000 for the first year and $84,000 for the second year. Using a simple 24-month average, what monthly income is used?
In a file escalation meeting, a processor sees facts tied to Discount Points Break Even Analysis. What should the file reflect?
During a mortgage operations checklist, a sponsorship reviewer identifies an issue involving points and fee calculations. Which response is most compliant?
A team member asks about DTI Calculation Guidelines in a consumer complaint triage while trying to explain the required action to the team. Which response should the file reviewer use?
A mortgage file is paused during a lock-desk handoff because of VA Loan Entitlement Calculation. Which answer should identify which rule controls the file?
A mortgage team asks a branch supervisor about DTI Calculation Rules during a company policy update. Which answer should guide the file?
A mortgage team asks a sponsorship reviewer about DTI Calculation Components during a file review. Which answer should guide the file?
Before the loan advances, a state compliance officer must resolve a LTV Ratio Calculation issue in a mortgage operations checklist. What should happen?
Before the loan advances, a branch supervisor must resolve a ARM features and caps issue in a ARM features and caps. What should happen?
In a closing-readiness check, a processor sees facts tied to LTV Calculation. What should the file reflect?
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