In a mortgage origination file, a late closing change occurs and the team must decide whether a new waiting period is required. Which action should be taken?
Correct Answer
B) Restart the wait only for APR, product, or prepayment penalty changes
Why this is correct: The rule for triggering a new waiting period is found in 12 CFR 1026.19(f)(2)(ii). It specifies that if a change is made after the initial Closing Disclosure is provided, a corrected disclosure and a new three-business-day wait are required only if the change concerns the Annual Percentage Rate (APR), the loan product, or introduces a prepayment penalty. Therefore, the action to take is to "Restart the wait only for APR, product, or prepayment penalty changes." Why the other choices are wrong: "Leave the Loan Estimate unchanged after the creditor learns the disclosed charge is inaccurate" is wrong because if a charge on the Loan Estimate becomes inaccurate, the creditor generally has an obligation to provide a revised estimate within three business days of knowing the facts. "Cure a tolerance problem by renaming the fee instead of documenting or refunding the variance" is wrong because proper tolerance cures involve the creditor paying the cost overage or refunding the borrower, not disguising the fee. "Treat the Corrected Closing Disclosure new waiting period review as complete because the file contains a related closing disclosure note" is wrong because the requirement is based on the occurrence of a specific triggering event, not on internal file notes. A note does not substitute for the legal obligation. Exam tip: The triggers for a new wait are substantive loan term changes (APR, product, prepayment penalty). Procedural notes in the file do not change the legal requirement.
Why This Is the Correct Answer
The correct response is "Restart the wait only for APR, product, or prepayment penalty changes" because Lines 205-206; 12 CFR 1026.19(f)(2)(ii).
Why the Other Options Are Wrong
Option A: Leave the Loan Estimate unchanged after the creditor learns the disclosed charge is inaccurate.
This choice is not the best answer because it applies the wrong file step for fee disclosure and tolerance treatment; the governing rule is tested by the correct option.
Option C: Cure a tolerance problem by renaming the fee instead of documenting or refunding the variance.
This choice is a tempting shortcut, but it conflicts with fee disclosure and tolerance treatment because the file still needs the required documentation, timing, or rule-based review before the action is taken.
Option D: Treat the Corrected Closing Disclosure new waiting period review as complete because the file contains a related closing disclosure note.
This distractor shifts the issue to a different trigger, product, or timing rule instead of applying the rule tested in the stem.
Memory Technique
Corrected Closing Disclosure new waiting period: identify the rule being tested, then choose the action that documents or applies that rule before the file moves forward.
Exam Tip
For fee disclosure and tolerance treatment 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
More Origination Questions
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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?
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A branch manager asks about a loan file because a processor wants to omit known monthly obligations from underwriting. What should happen?
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