In a pricing desk question, a risk reviewer sees facts tied to SCRA Foreclosure Protections. What should the file reflect?
Correct Answer
B) Document the servicemember status before taking action
Why this is correct: The Servicemembers Civil Relief Act (SCRA) requires a creditor to obtain a court order before foreclosing on a mortgage if the servicemember entered active duty before the obligation arose and the servicemember's ability to pay is materially affected. The essential first step is to determine and document the borrower's military status. Therefore, the file must reflect that the reviewer should "Document the servicemember status before taking action." Why the other choices are wrong: "Use an internal exception instead of the required federal disclosure or timing rule" is wrong because SCRA's foreclosure protections are statutory and cannot be circumvented by internal policy. "Apply the SAFE Act testing timing rule even though the file is testing SCRA Foreclosure Protections" is wrong because the SAFE Act governs MLO licensing and testing, not foreclosure procedures under SCRA. "Rely on oral agreement when the rule requires documented compliance" is wrong because SCRA requires formal status verification, often through a database check. Exam tip: SCRA foreclosure protections are not automatic; they apply only if the mortgage obligation originated before active duty. Always verify the timing of the loan versus the start of active duty.
Why This Is the Correct Answer
The correct response is "Document the servicemember status before taking action" 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: Apply the SAFE Act testing timing rule even though the file is testing SCRA Foreclosure Protections.
This distractor shifts the issue to a different trigger, product, or timing rule instead of applying the rule tested in the stem.
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
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
More Federal Laws Questions
A mortgage file is paused during a lock-desk handoff because of FCRA Adverse Action Notices. Which answer should identify which rule controls the file?
Before the team acts on a production meeting, a training manager must address SCRA Interest Rate Cap. Which response is most defensible?
Before the team acts on a production meeting, the MLO must address FCRA Adverse Action Notice. Which response is most defensible?
A team member asks about RESPA Kickbacks and Referrals in an investor-delivery review while trying to confirm the rule-based response. Which response should the loan team use?
During a disclosure desk review, the loan team encounters an RESPA Servicing Transfer issue. Which response should avoid a shortcut that would misapply the rule?
A mortgage team asks a quality-control reviewer about TRID Loan Estimate timing during a record-retention audit. Which answer should guide the file?
A mortgage team asks a branch supervisor about TILA APR and finance-charge rules during a renewal checklist. Which answer should guide the file?
A mortgage file is paused during a risk-control review because of TILA QM DTI Calculation. Which answer should choose the most defensible file action?
A disciplinary-risk review raises a question about TILA APR and finance-charge rules. Which action should the renewal specialist recommend?
An MLO is reviewing procedures for a case where a compliance analyst asks why covered mortgage application data is collected. What is the proper handling?
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