A processor compares the file facts with TRID Loan Estimate Timing during a new-hire scenario. Which conclusion is accurate?
Correct Answer
C) Document the changed circumstance before resetting tolerance
Why this is correct: Under TRID/Regulation Z, a creditor may issue a revised Loan Estimate and reset fee tolerances only if a valid "changed circumstance" has occurred. The rule requires this circumstance to be documented. "Document the changed circumstance before resetting tolerance" accurately states this prerequisite. Why the other choices are wrong: "Redisclose only after consummation because the file already has a Closing Disclosure" is incorrect; a revised Loan Estimate can be issued before consummation if a valid changed circumstance occurs. "Use a revised disclosure to reset tolerances without a documented event" violates the rule, as a documented event is required. "Treat a rate lock as a changed circumstance for unrelated settlement fees" is wrong; a rate lock is not a valid changed circumstance for fees it does not affect. Exam tip: A revised Loan Estimate is only permissible with a documented, bona fide changed circumstance (e.g., changed property value, unforeseen event). Never use it just to reset tolerances.
Why This Is the Correct Answer
The correct response is "Document the changed circumstance before resetting tolerance" because Changed circumstances can permit revised estimates only when Regulation Z conditions and timing are met.
Why the Other Options Are Wrong
Option A: Redisclose only after consummation because the file already has a Closing Disclosure.
This choice is a tempting shortcut, but it conflicts with changed-circumstance documentation because the file still needs the required documentation, timing, or rule-based review before the action is taken.
Option B: Use a revised disclosure to reset tolerances without a documented event.
This choice is a tempting shortcut, but it conflicts with changed-circumstance documentation because the file still needs the required documentation, timing, or rule-based review before the action is taken.
Option D: Treat a rate lock as a changed circumstance for unrelated settlement fees.
This choice is not the best answer because it applies the wrong file step for changed-circumstance documentation; the governing rule is tested by the correct option.
Memory Technique
changed-circumstance review: identify the rule being tested, then choose the action that documents or applies that rule before the file moves forward.
Exam Tip
For changed-circumstance documentation 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
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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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