A mortgage file is paused during a lock-desk handoff because of TILA Loan Estimate Revisions. Which answer should apply the requirement without relying on borrower preference?
Correct Answer
A) Disclose settlement charges within TRID timing rules
Why this is correct: The TRID rule mandates that creditors provide a Loan Estimate with good faith estimates of settlement charges within specific timeframes after application. The original explanation correctly states that TRID fee disclosures and tolerance categories govern estimates and revisions. "Disclose settlement charges within TRID timing rules" is the foundational requirement that applies regardless of borrower preference, ensuring the borrower receives accurate cost information when legally required. Why the other choices are wrong: "Use the lowest advertised provider quote after a different provider has been selected" is wrong because if a borrower selects a provider from the written list, the creditor must use that provider's actual quote for tolerance purposes, not a lower advertised rate. "Treat a changed provider fee as unlimited solely because it is paid to a third party" is wrong because many third-party fees fall into specific tolerance categories (zero, 10%, unlimited); the fact a fee is paid to a third party does not automatically make it unlimited. "Leave the Loan Estimate unchanged after the creditor learns the disclosed charge is inaccurate" is wrong because TRID requires a revised Loan Estimate if a change causes the charge to exceed a permitted tolerance before closing. Exam tip: For TRID fee questions, first identify the correct timing rule, then apply the proper tolerance category (zero, 10%, unlimited) to the specific fee.
Why This Is the Correct Answer
The correct response is "Disclose settlement charges within TRID timing rules" because TRID fee disclosures and tolerance categories govern estimates, revisions, and closing-cost comparison.
Why the Other Options Are Wrong
Option B: Use the lowest advertised provider quote after a different provider has been selected.
This choice is not the best answer because it applies the wrong file step for fee disclosure and tolerance treatment; the governing rule is tested by the correct option.
Option C: Treat a changed provider fee as unlimited solely because it is paid to a third party.
This choice is a tempting shortcut, but it conflicts with fee disclosure and tolerance treatment because the file still needs the required documentation, timing, or rule-based review before the action is taken.
Option D: Leave the Loan Estimate unchanged after the creditor learns the disclosed charge is inaccurate.
This choice is not the best answer because it applies the wrong file step for fee disclosure and tolerance treatment; the governing rule is tested by the correct option.
Memory Technique
TILA Loan Estimate Revisions: identify the rule being tested, then choose the action that documents or applies that rule before the file moves forward.
Exam Tip
For fee disclosure and tolerance treatment 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?
People Also Study
Federal Mortgage-Related Laws
24% of exam
General Mortgage Knowledge
20% of exam
Ethics, Fraud & Consumer Protection
18% of exam
Uniform State Test Content
11% of exam