A branch manager asks about a loan file because the consumer locks the interest rate after the initial disclosure package. What should happen?
Correct Answer
C) Send the revised Loan Estimate within three business days
Why this is correct: The governing rule is Regulation Z (the governing federal rule, which mandates that if a rate lock occurs after the initial Loan Estimate is provided and changes the terms requiring a revised estimate, the creditor must send that revised Loan Estimate to the consumer within three business days of the rate lock. This is a strict timing requirement to ensure the consumer receives accurate, updated cost information. Why the other choices are wrong: "Delay the Rate lock revised Loan Estimate timing step until a later construction draw review instead of acting now" is wrong because the three-business-day deadline is triggered by the rate lock event, not a future construction review. "Ignore the lock expiration because underwriting delay was internal" is wrong because the cause of a delay does not excuse the redisclosure requirement when a rate lock changes terms. "Charge a lock-extension fee without confirming who caused the delay and what was disclosed" is wrong because charging any fee requires proper disclosure and justification; it is not the required immediate action for the rate lock event itself. Exam tip: Remember the sequence: rate lock after initial disclosure = revised Loan Estimate due in 3 business days. This is a key TRID timing rule.
Why This Is the Correct Answer
The correct response is "Send the revised Loan Estimate within three business days" because Lines 198-203; 12 CFR 1026.19(e)(3)(iv)(D).
Why the Other Options Are Wrong
Option A: Delay the Rate lock revised Loan Estimate timing step until a later construction draw review instead of acting now.
This distractor shifts the issue to a different trigger, product, or timing rule instead of applying the rule tested in the stem.
Option B: Ignore the lock expiration because underwriting delay was internal.
This choice is a tempting shortcut, but it conflicts with rate-lock documentation because the file still needs the required documentation, timing, or rule-based review before the action is taken.
Option D: Charge a lock-extension fee without confirming who caused the delay and what was disclosed.
This choice is a tempting shortcut, but it conflicts with rate-lock documentation because the file still needs the required documentation, timing, or rule-based review before the action is taken.
Memory Technique
rate-lock agreements: identify the rule being tested, then choose the action that documents or applies that rule before the file moves forward.
Exam Tip
For rate-lock 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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