A processor notices that a file received the six pieces of information on the 3rd and the Loan Estimate went out on the 9th, with no weekend or holiday in between. What has gone wrong?
Correct Answer
D) Provide the Loan Estimate within three business days
Why this is correct: Under Regulation Z (12 CFR 1026.19(e)(1)(iii)), once a creditor receives the six pieces of information that constitute an application, it must provide the Loan Estimate within three business days. This action is mandatory and not delayed by underwriting or other steps. Why the other choices are wrong: "Quote final loan terms without identifying which facts are still assumptions" is wrong because the Loan Estimate discloses estimated terms; quoting final terms prematurely is misleading. "Resolve the Initial Loan Estimate timing issue with the secondary-market delivery exception that does not fit the facts" is wrong because an inapplicable exception does not excuse missing the deadline. "Delay the early disclosure until underwriting has confirmed the borrower income" is wrong because income confirmation occurs after the application trigger and does not delay the Loan Estimate deadline. Exam tip: The correct action is always to provide the Loan Estimate within 3 business days of receiving an application.
Why This Is the Correct Answer
The correct response is "Provide the Loan Estimate within three business days" because Lines 191-203; 12 CFR 1026.19(e)(1)(iii).
Why the Other Options Are Wrong
Option A: 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.
Option B: Resolve the Initial Loan Estimate timing issue with the secondary-market delivery exception that does not fit the facts.
This distractor shifts the issue to a different trigger, product, or timing rule instead of applying the rule tested in the stem.
Option C: Delay the early disclosure until underwriting has confirmed the borrower income.
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.
Memory Technique
Initial 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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