A disclosure specialist is resolving Temporary Authority during a quality-control sample. Which action best fits the rule?
Correct Answer
A) Stop temporary authority when the application is denied or withdrawn
Why this is correct: Temporary authority is a limited permission to originate loans while a full license is processed. It ends upon specific events. "Stop temporary authority when the application is denied or withdrawn" correctly identifies one such terminating event, ensuring the MLO does not continue to operate under temporary authority after eligibility ceases. Why the other choices are wrong: "Use prior experience as a substitute for the required rule" is wrong because the rules for when temporary authority ends are fixed by law. "Proceed first and document the compliance issue only if an examiner asks" is wrong because it ignores the duty to actively stop the authority when a terminating event occurs. "Assume the Temporary Authority condition is met because the borrower satisfied the separate refinance benefit requirement" is wrong because a borrower's refinance benefit is unrelated to the MLO's temporary authority status. Exam tip: Temporary authority can end before the 120-day maximum. Key end events include denial/withdrawal of the license application, issuance of the full license, or expiration of the 120 days.
Why This Is the Correct Answer
The correct response is "Stop temporary authority when the application is denied or withdrawn" because Temporary authority has eligibility limits, start and end events, and a 120-day outer period.
Why the Other Options Are Wrong
Option B: Use prior experience as a substitute for the required rule.
Use prior experience as a substitute for the required rule. is not correct because it does not apply the rule tested by this file scenario.
Option C: Proceed first and document the compliance issue only if an examiner asks.
Proceed first and document the compliance issue only if an examiner asks. is not correct because it does not apply the rule tested by this file scenario.
Option D: Assume the Temporary Authority condition is met because the borrower satisfied the separate refinance benefit requirement.
This distractor shifts the issue to a different trigger, product, or timing rule instead of applying the rule tested in the stem.
Memory Technique
temporary authority: 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 temporary authority; 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
More UST Questions
In a pricing desk question, an audit analyst sees facts tied to Prohibited Misrepresentation. What should the file reflect?
An applicant previously had an MLO license revoked by a state regulator. Under the SAFE Act minimum standards for a new state-licensed MLO license, which statement is correct?
Which statement correctly distinguishes a license suspension from a license revocation?
A state regulator has issued an order suspending an MLO's authority effective immediately. The MLO has filed an appeal, but no stay has been granted. What should the MLO do?
An MLO license application asks whether the applicant has been the subject of a regulatory order. The applicant has a recent consent order that falls within the question. What is the proper response?
Why does NMLS maintain licensing and enforcement information that participating regulators can access?
A regulator issues a final license suspension without giving the MLO notice of the alleged violation or any opportunity to respond, even though applicable law requires both. What issue is presented?
A regulator finds that an MLO charged consumers prohibited fees. Which set of actions is consistent with the enforcement tools contemplated by Regulation H?
An MLO's license status in NMLS changes to suspended, with no stay or reinstatement shown. What is the immediate operational effect?
Which fact most directly supports disciplinary action against an MLO rather than merely a request for additional application information?
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