A mortgage file is paused during a policy refresh meeting because of TRID Transaction Classification. Which answer should choose the most defensible file action?
Correct Answer
A) Use refinance or cash-out rules when proceeds change
Why this is correct: TRID (TILA-RESPA Integrated Disclosure) rules differ significantly based on transaction type. The original explanation correctly groups purchase, refinance, and cash-out as distinct types. A "refinance or cash-out" occurs when loan proceeds change the existing obligation, triggering specific disclosure and compliance requirements. Using the correct classification is the defensible first step. Why the other choices are wrong: "Delay the TRID Transaction Classification step until a later quality-control review instead of acting now" is wrong because accurate classification is required upfront to provide correct disclosures. "Ignore product, occupancy, LTV, or eligibility limits because the borrower prefers the loan" is wrong because transaction rules are legal requirements, not preferences. "Use the same treatment for all mortgage products without comparing program requirements" is wrong because it would lead to misapplication of TRID rules, which vary by transaction type. Exam tip: The key to TRID is accurate transaction classification first. Ask: Is this a purchase, a rate/term refinance, or a cash-out refinance?
Why This Is the Correct Answer
The correct response is "Use refinance or cash-out rules when proceeds change" because Purchase, refinance, cash-out, construction, and home-equity transactions have different disclosure and risk rules.
Why the Other Options Are Wrong
Option B: Delay the TRID Transaction Classification step until a later quality-control 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 C: Ignore product, occupancy, LTV, or eligibility limits because the borrower prefers the loan.
Ignore product, occupancy, LTV, or eligibility limits because the borrower prefers the loan. is not correct because it does not apply the rule tested by this file scenario.
Option D: Use the same treatment for all mortgage products without comparing program requirements.
Use the same treatment for all mortgage products without comparing program requirements. is not correct because it does not apply the rule tested by this file scenario.
Memory Technique
TRID Transaction Classification: identify the rule being tested, then choose the action that documents or applies that rule before the file moves forward.
Exam Tip
Match the file facts to TRID Transaction Classification; do not choose an exception or shortcut that skips the required rule.
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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