Before the team acts on a servicing handoff check, a licensing coordinator must address TILA Advertising Requirements. Which response is most defensible?
Correct Answer
A) Advertise only terms actually available
Why this is correct: TILA's advertising rules (Regulation Z) require that advertised terms for credit be actually available to consumers. Ads must be truthful and not misleading. If specific "trigger terms" like a payment amount or APR are advertised, additional detailed disclosures are required. The defensible practice is to "Advertise only terms actually available." Why the other choices are wrong: Applying a correct general concept to the wrong stage (e.g., escrow analysis) does not satisfy the specific TILA advertising rule. Waiting for a regulator to ask is a compliance failure, as advertising rules are proactively enforced. Relying on an oral agreement is insufficient, as advertising compliance is based on the objective content of the ad itself. Exam tip: For TILA advertising, truthfulness and the availability of advertised terms are paramount. If an ad mentions specific numbers, remember the related trigger-term disclosure requirements.
Why This Is the Correct Answer
The correct response is "Advertise only terms actually available" because Mortgage advertisements must be truthful and include required APR or trigger-term disclosures.
Why the Other Options Are Wrong
Option B: Apply the correct general concept to the wrong escrow analysis stage rather than the TILA Advertising Requirements rule.
This distractor shifts the issue to a different trigger, product, or timing rule instead of applying the rule tested in the stem.
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: Rely on oral agreement when the rule requires documented compliance.
Rely on oral agreement when the rule requires documented compliance. is not correct because it does not apply the rule tested by this file scenario.
Memory Technique
TILA advertising: 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 TILA advertising; 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
More Federal Laws Questions
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