In a pricing desk question, a compliance analyst sees facts tied to TRID Refinance Classification. What should the file reflect?

Correct Answer

A) Use refinance or cash-out rules when proceeds change

Why this is correct: The correct action is to "Use refinance or cash-out rules when proceeds change." TRID and other regulations have distinct disclosure and underwriting requirements for different transaction types. A "rate-and-term" refinance (where proceeds only pay off the existing mortgage) is treated differently from a "cash-out" refinance (where the borrower receives additional cash). The intended use of the loan proceeds is a key fact that determines which set of rules applies. Why the other choices are wrong: The choice to "Apply a different loan-program rule without checking the file facts" is wrong because the correct classification depends on the specific facts of the file regarding the use of proceeds. The choice to "Ignore product, occupancy, LTV, or eligibility limits because the borrower prefers the loan" is wrong because borrower preference cannot override the legal and investor requirements tied to the transaction type. The choice to "Use the same treatment for all mortgage products without comparing program requirements" is wrong because conventional, FHA, and VA loans, for example, have different definitions and guidelines for what constitutes a cash-out refinance. Exam tip: For refinances, always ask: "Is the borrower taking cash out beyond closing costs and existing debt payoffs?" The answer dictates the regulatory and program path.