An audit analyst compares the file facts with TILA Loan Estimate Timing during a borrower follow-up call. Which conclusion is accurate?
Correct Answer
B) Give the required disclosure or notice on time
Why this is correct: TILA and TRID impose strict timing deadlines for providing key disclosures. The Loan Estimate must be provided within three business days after receiving a loan application and no later than seven business days before consummation. "On time" delivery of these required disclosures is a fundamental, non-negotiable compliance obligation. Why the other choices are wrong: "Wait to respond until the borrower submits every underwriting condition" violates the timing rule; the Loan Estimate clock starts when the application is received, not when conditions are satisfied. "Treat a casual inquiry as an application even though required application information is missing" is incorrect because an application requires the submission of six specific pieces of information (e.g., name, income, SSN, property address, value, loan amount); a casual inquiry lacks these. "Quote final loan terms without identifying which facts are still assumptions" is misleading and violates the requirement that the Loan Estimate be based on the best information reasonably available at the time. Exam tip: The three-day deadline for the Loan Estimate is triggered by the receipt of an 'application' (the six pieces of info). Know what constitutes an application to start the clock correctly.
Why This Is the Correct Answer
The correct response is "Give the required disclosure or notice on time" because Borrower communication must be timely, accurate, and tied to disclosure or action-notice duties.
Why the Other Options Are Wrong
Option A: Wait to respond until the borrower submits every underwriting condition.
This choice is not the best answer because it applies the wrong file step for borrower communication and early-disclosure timing; the governing rule is tested by the correct option.
Option C: Treat a casual inquiry as an application even though required application information is missing.
This choice is not the best answer because it applies the wrong file step for borrower communication and early-disclosure timing; the governing rule is tested by the correct option.
Option D: Quote final loan terms without identifying which facts are still assumptions.
This choice is a tempting shortcut, but it conflicts with borrower communication and early-disclosure timing because the file still needs the required documentation, timing, or rule-based review before the action is taken.
Memory Technique
TILA Loan Estimate Timing: identify the rule being tested, then choose the action that documents or applies that rule before the file moves forward.
Exam Tip
For borrower communication and early-disclosure timing 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
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