A branch manager asks about a loan file because a cost changes after the Closing Disclosure has already been provided. What should happen?
Correct Answer
C) Use a corrected Closing Disclosure instead of a revised Loan Estimate
Why this is correct: The governing concept is the TRID rule for handling cost changes after the Closing Disclosure has been provided. Under 12 CFR 1026.19(e)(4)(ii) and (f)(2), once the Closing Disclosure has been issued, the proper mechanism for addressing changes is a corrected Closing Disclosure, not a revised Loan Estimate. The revised Loan Estimate is only used before the Closing Disclosure is provided. Why the other choices are wrong: "Use a revised disclosure to reset tolerances without a documented event" is wrong because a revised or corrected disclosure requires a valid reason, such as a changed circumstance, and cannot be used arbitrarily to reset tolerances. "Treat a rate lock as a changed circumstance for unrelated settlement fees" is wrong because a rate lock is not a valid changed circumstance for fees that are not directly related to the rate lock. "Ignore redisclosure timing because the borrower verbally accepted the new terms" is wrong because verbal acceptance does not waive the requirement to provide corrected disclosures within applicable timing rules. Exam tip: The procedural fork is critical: before Closing Disclosure = revised Loan Estimate; after Closing Disclosure = corrected Closing Disclosure.
Why This Is the Correct Answer
The correct response is "Use a corrected Closing Disclosure instead of a revised Loan Estimate". Once the Closing Disclosure has been provided, the cure path is through corrected Closing Disclosure rules, not a new revised Loan Estimate.
Why the Other Options Are Wrong
Option A: 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 B: 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.
Option D: Ignore redisclosure timing because the borrower verbally accepted the new terms.
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.
Memory Technique
After the Closing Disclosure appears in the fact pattern, think corrected CD.
Exam Tip
For changed-circumstance documentation questions, separate the required file step from plausible sales, timing, or documentation shortcuts.
Common Mistakes to Avoid
- -Students sometimes keep using revised Loan Estimates too late in the process.
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?
A construction-to-permanent loan will disburse in 5 draws over 11 months before the permanent phase begins. Which Regulation Z appendix provides a disclosure method for multiple-advance construction transactions?
Before closing, the team discovers that a borrower asks which upfront charge can be collected before intent to proceed. What is the safest compliant answer?
A construction loan agreement allows advances only after documented completion of specified work. A builder requests the next draw, but no completion evidence has been provided. What should occur?
Before releasing the final construction draw, which combination most directly supports project completion and clear collateral?
A construction-to-permanent loan will convert to a substantially higher fully amortizing payment. Which payment is especially important when assessing the borrower's long-term repayment capacity?
A construction-to-permanent note states that conversion requires completion, a certificate of occupancy, and no unresolved liens. Construction is finished, but a mechanic's lien remains. What should happen?
A branch manager asks about a loan file because a processor wants to omit known monthly obligations from underwriting. What should happen?
People Also Study
Federal Mortgage-Related Laws
24% of exam
General Mortgage Knowledge
20% of exam
Ethics, Fraud & Consumer Protection
18% of exam
Uniform State Test Content
11% of exam
Related Study Resources
Previous Question
A processor handoff raises a TRID Changed Circumstances question for a risk reviewer. What answer should guide the file?
Next Question
during a prequalification and debt updates review, a training manager identifies an issue involving prequalification and debt updates. Which response is most compliant?