A servicemember on active duty applies for a new mortgage at 7.25% and asks whether the rate must be cut to 6% because of his status. How should the request be answered?
Correct Answer
B) Apply SCRA protections for eligible active-duty service
Why this is correct: The Servicemembers Civil Relief Act (SCRA) provides specific legal protections to eligible active-duty servicemembers concerning pre-service obligations, including interest rate reductions, stays of civil proceedings, and foreclosure protections. When a file's facts indicate a borrower may be an eligible servicemember, the SCRA rules must be applied. The correct action is to "Apply SCRA protections for eligible active-duty service." Why the other choices are wrong: "Use an internal exception instead of the required federal disclosure or timing rule" is wrong because SCRA is federal law; internal exceptions cannot override statutory protections. "Wait until a regulator asks for the file before applying the federal requirement" is wrong because SCRA protections are mandatory and must be applied as soon as eligibility is known, not deferred. "Apply the quality-control timing rule even though the file is testing SCRA Protections" is wrong because the specific legal requirement (SCRA) takes precedence over a general internal quality-control timing rule. Exam tip: When you see SCRA in a question, the correct answer will almost always involve verifying eligibility and applying the specific statutory protections. Do not substitute a generic process.
Why This Is the Correct Answer
The correct response is "Apply SCRA protections for eligible active-duty service" because SCRA protects eligible servicemembers on covered obligations and foreclosure actions.
Why the Other Options Are Wrong
Option A: Use an internal exception instead of the required federal disclosure or timing rule.
Use an internal exception instead of the required federal disclosure or timing rule. is not correct because it does not apply the rule tested by this file scenario.
Option C: Wait until a regulator asks for the file before applying the federal requirement.
Wait until a regulator asks for the file before applying the federal requirement. is not correct because it does not apply the rule tested by this file scenario.
Option D: Apply the quality-control timing rule even though the file is testing SCRA Protections.
This distractor shifts the issue to a different trigger, product, or timing rule instead of applying the rule tested in the stem.
Memory Technique
SCRA borrower protections: 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 SCRA borrower protections; 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
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