A processor asks how to handle a file where a first-lien appraisal is complete before closing. Which response is most accurate?
Correct Answer
C) Provide valuation copies promptly or three business days before closing
Why this is correct: Regulation B (ECOA) mandates that for covered first-lien dwelling loans, the creditor must provide a copy of the appraisal or other written valuation to the applicant promptly upon completion, or at least three business days before closing, whichever is earlier. This ensures the applicant receives the valuation in time. Why the other choices are wrong: "Treat prior mortgage experience as a substitute for the required compliance condition" is wrong because prior experience does not exempt a lender from current Regulation B obligations. "Use a generic national checklist instead of the requirement in this supervisory exam response" is wrong because a generic checklist might omit the specific Regulation B timing rule, which is required. "Document that licensing and NMLS authority was reviewed, but take no required corrective action" is wrong because documenting a review does not fulfill the action of actually providing the valuation copy. Exam tip: The appraisal copy rule is a specific ECOA provision. Don't confuse it with other disclosure timelines like TILA-RESPA.
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: Treat prior mortgage experience as a substitute for the required compliance condition.
Treat prior mortgage experience as a substitute for the required compliance condition. is not correct because it bypasses the rule supported by the explanation.
Option B: Use a generic national checklist instead of the requirement in this supervisory exam response.
Use a generic national checklist instead of the requirement in this supervisory exam response. is not correct because it bypasses the rule supported by the explanation.
Option D: 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.
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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