One day before consummation, the loan changes from a fixed-rate product to an adjustable-rate product. What is the TRID consequence?

Correct Answer

B) The product change requires a corrected Closing Disclosure and a new three-business-day waiting period

Why this is correct: Changing from a fixed-rate to an adjustable-rate mortgage is a fundamental change to the loan product. Under TRID, this is one of the specific events that triggers a requirement for a corrected Closing Disclosure and a new three-business-day waiting period before consummation. As the original explanation states, when the disclosed loan product becomes inaccurate, the creditor must provide the corrected disclosure. This allows the consumer adequate time to review the significant new terms associated with an adjustable-rate product, such as adjustment periods, indexes, and caps. Why the other choices are wrong: "No disclosure correction is needed if the payment initially falls" is wrong because the product change itself is a triggering event, regardless of any initial payment change; the corrected disclosure and waiting period are mandatory. "Only the appraisal must be redelivered" is wrong because an appraisal is unrelated to a change in the loan's interest rate structure; the TRID disclosure requirements are separate. "The change can be disclosed on the first periodic statement" is wrong because the first periodic statement is sent after the loan is closed; the product change must be disclosed and agreed to *before* consummation via the corrected Closing Disclosure. Exam tip: A change in loan product (e.g., fixed to ARM) is a major TRID trigger. It always requires a corrected CD and a new 3-day wait.