A lender receives a written application for a federally related mortgage loan to purchase a one-to-four-family residence. No exception applies. When must the RESPA special information booklet generally be delivered or mailed?
Correct Answer
C) No later than three business days after the application is received or prepared
Why this is correct: Regulation X under RESPA governs the delivery of the special information booklet. For a covered federally related mortgage loan to purchase a one-to-four-family residence, the booklet must generally be delivered or mailed to the applicant no later than three business days after the lender receives or prepares the written application. This is a mandatory timing rule unless a specific exception applies. Why the other choices are wrong: The choice "At the first annual escrow statement" is wrong because the booklet is required at the start of the application process, not months later at an annual escrow review. The choice "Only after approval" is wrong because the booklet must be provided early to inform the consumer's decision-making, not after the loan is approved. The choice "Thirty days after consummation" is wrong because the booklet is a pre-consummation disclosure designed to be delivered well before the loan closes. Exam tip: Remember the three-business-day rule for the RESPA booklet for purchase loans. Key exceptions are for refinances, reverse mortgages, and certain subordinate-lien loans.
Why This Is the Correct Answer
Why this is correct: Regulation X under RESPA governs the delivery of the special information booklet. For a covered federally related mortgage loan to purchase a one-to-four-family residence, the booklet must generally be delivered or mailed to the applicant no later than three business days after the lender receives or prepares the written application. This is a mandatory timing rule unless a specific exception applies. Why the other choices are wrong: The choice "At the first annual escrow statement" is wrong because the booklet is required at the start of the application process, not months later at an annual escrow review. The choice "Only after approval" is wrong because the booklet must be provided early to inform the consumer's decision-making, not after the loan is approved. The choice "Thirty days after consummation" is wrong because the booklet is a pre-consummation disclosure designed to be delivered well before the loan closes. Exam tip: Remember the three-business-day rule for the RESPA booklet for purchase loans. Key exceptions are for refinances, reverse mortgages, and certain subordinate-lien loans.
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