A processor asks how to handle a file where a late closing change occurs and the team must decide whether a new waiting period is required. Which response is most accurate?
Correct Answer
A) Restart the wait only for APR, product, or prepayment penalty changes
Why this is correct: The question tests the specific conditions under which a corrected Closing Disclosure and a new three-business-day waiting period are mandated. The TILA-RESPA rule (the governing federal rule states this requirement applies only if there is a change to the Annual Percentage Rate (APR), a change in the loan product, or the addition of a prepayment penalty. All other changes, even if they occur late, do not trigger this new waiting period. Therefore, the most accurate response is "Restart the wait only for APR, product, or prepayment penalty changes." Why the other choices are wrong: "Leave the Loan Estimate unchanged after the creditor learns the disclosed charge is inaccurate" is wrong because Regulation Z requires an updated Loan Estimate to be provided if the original becomes inaccurate within specified timeframes. "Resolve the Corrected Closing Disclosure new waiting period issue with the privacy notice exception that does not fit the facts" is wrong because privacy notice rules (like GLBA) are unrelated to TRID timing requirements for closing disclosures. "Move the fee to a different category to avoid a tolerance cure" is wrong because fees must be disclosed in their proper category; mis-categorizing to avoid a cure is a violation. Exam tip: Isolate the change. If it's not one of the three big triggers (APR, product, prepayment penalty), no new wait is needed.
Why This Is the Correct Answer
The correct response is "Restart the wait only for APR, product, or prepayment penalty changes". Only the specified APR, product, or prepayment penalty changes trigger the new three business day waiting period.
Why the Other Options Are Wrong
Option B: 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.
Option C: Resolve the Corrected Closing Disclosure new waiting period issue with the privacy notice exception that does not fit the facts.
This distractor shifts the issue to a different trigger, product, or timing rule instead of applying the rule tested in the stem.
Option D: Move the fee to a different category to avoid a tolerance cure.
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
Memorize the three restart triggers: APR, product, prepayment penalty.
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
- -Not every corrected Closing Disclosure creates a fresh waiting period.
More Origination Questions
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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?
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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?
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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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