A changed-circumstance review raises a question about changed-circumstance review. Which action should the compliance manager recommend?
Correct Answer
B) Use corrected Closing Disclosure rules after the CD is provided
Why this is correct: Under TRID rules, after a Closing Disclosure (CD) has been provided, the proper mechanism for addressing certain changes (like corrections) is governed by the "corrected Closing Disclosure" rules. A valid changed circumstance (e.g., an unexpected event that increases costs) can allow for a revised disclosure, but after the CD is issued, the specific corrected CD procedures and timing must be followed. Why the other choices are wrong: "Redisclose only after consummation because the file already has a Closing Disclosure" is incorrect because changes before consummation often require a corrected CD to be provided at least three business days before closing. "Use a revised disclosure to reset tolerances without a documented event" is prohibited; a revised estimate to reset tolerances is only permitted if a valid, documented changed circumstance occurs. "Treat a rate lock as a changed circumstance for unrelated settlement fees" is wrong; a rate lock is a valid changed circumstance only for interest-rate-dependent charges, not for unrelated fees. Exam tip: Know the sequence: Loan Estimate first, then Changed Circumstance for revisions, then Closing Disclosure, then Corrected Closing Disclosure rules apply for changes after the CD.
Why This Is the Correct Answer
The correct response is "Use corrected Closing Disclosure rules after the CD is provided" because Changed circumstances can permit revised estimates only when Regulation Z conditions and timing are met.
Why the Other Options Are Wrong
Option A: Redisclose only after consummation because the file already has a Closing Disclosure.
This choice is a tempting shortcut, but it conflicts with changed-circumstance documentation because the file still needs the required documentation, timing, or rule-based review before the action is taken.
Option C: Use a revised disclosure to reset tolerances without a documented event.
This choice is a tempting shortcut, but it conflicts with changed-circumstance documentation because the file still needs the required documentation, timing, or rule-based review before the action is taken.
Option D: Treat a rate lock as a changed circumstance for unrelated settlement fees.
This choice is not the best answer because it applies the wrong file step for changed-circumstance documentation; the governing rule is tested by the correct option.
Memory Technique
changed-circumstance review: identify the rule being tested, then choose the action that documents or applies that rule before the file moves forward.
Exam Tip
For changed-circumstance documentation questions, separate the required file step from plausible sales, timing, or documentation shortcuts.
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 Origination Questions
Before the team acts on a servicing handoff check, a closing coordinator must address Asset Verification and Reserves. Which response is most defensible?
An MLO is reviewing procedures for a case where a cost changes after the Closing Disclosure has already been provided. What is the proper handling?
During a post-application update, a quality-control reviewer encounters a Credit Analysis and Evaluation issue. Which response should avoid a shortcut that would misapply the rule?
A construction-to-permanent loan will disburse in 5 draws over 11 months before the permanent phase begins. Which Regulation Z appendix provides a disclosure method for multiple-advance construction transactions?
Before closing, the team discovers that a borrower asks which upfront charge can be collected before intent to proceed. What is the safest compliant answer?
A construction loan agreement allows advances only after documented completion of specified work. A builder requests the next draw, but no completion evidence has been provided. What should occur?
Before releasing the final construction draw, which combination most directly supports project completion and clear collateral?
A construction-to-permanent loan will convert to a substantially higher fully amortizing payment. Which payment is especially important when assessing the borrower's long-term repayment capacity?
A construction-to-permanent note states that conversion requires completion, a certificate of occupancy, and no unresolved liens. Construction is finished, but a mechanic's lien remains. What should happen?
A branch manager asks about a loan file because a processor wants to omit known monthly obligations from underwriting. What should happen?
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New property information that could not reasonably have been known when the Loan Estimate was issued directly increases a required, non-shoppable title-service fee by $340. The creditor has sufficient evidence of the change, has not issued the Closing Disclosure, and can meet the revised Loan Estimate receipt deadline. To use the justified increase as a revised baseline, what should the creditor do?
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