An MLO is reviewing procedures for a case where a closing is approaching and the borrower has not yet received the Closing Disclosure. What is the proper handling?
Correct Answer
A) Ensure receipt three business days before consummation
Why this is correct: The TRID rule explicitly requires that the consumer receives the Closing Disclosure at least three business days before consummation (the governing federal rule This is a core pre-closing timing mandate. Therefore, the proper handling is to ensure receipt three business days before consummation. Why the other choices are wrong: "Cure a tolerance problem by renaming the fee instead of documenting or refunding the variance" is wrong because mischaracterizing a fee does not resolve a tolerance violation; the proper cures are based on specific regulatory allowances or refunds. "Move the fee to a different category to avoid a tolerance cure" is wrong because fees must be placed in the correct category per regulation; moving them to avoid tolerance limits is non-compliant. "Increase a zero-tolerance charge because the borrower accepted the cost verbally" is wrong because zero-tolerance charges (e.g., the lender's origination fee) generally cannot increase at all, and verbal acceptance does not override this prohibition. Exam tip: Remember the sequence: Closing Disclosure receipt triggers the three-business-day waiting period. This period must be complete before the loan closes.
Why This Is the Correct Answer
The correct response is "Ensure receipt three business days before consummation". The Closing Disclosure is a pre-consummation disclosure, so receipt must occur at least three business days before consummation.
Why the Other Options Are Wrong
Option B: Cure a tolerance problem by renaming the fee instead of documenting or refunding the variance.
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 C: 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.
Option D: Increase a zero-tolerance charge because the borrower accepted the cost verbally.
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.
Memory Technique
Closing Disclosure means three business days before consummation.
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
- -Closing Disclosure timing is not satisfied by same-day delivery at settlement.
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?
Between the Loan Estimate and closing, prepaid interest increases $180, homeowner insurance increases $95, transfer taxes increase $40, and a credit report fee for which the consumer could not shop increases $12. There is no valid revised estimate or other exception. Which increases violate TRID's zero-tolerance rule?
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