A creditor receives the consumer's name, income, Social Security number to obtain a credit report, property address, estimated property value, and requested loan amount for a covered mortgage. What has occurred for Loan Estimate timing purposes?
Correct Answer
D) Receipt of an application that starts the Loan Estimate delivery period
Why this is correct: Under TRID, an application is defined as the submission of six specific pieces of information: name, income, Social Security number, property address, estimated property value, and loan amount. Receipt of these six items triggers the creditor's obligation to provide a Loan Estimate within three business days. Why the other choices are wrong: 'Nothing until the consumer submits tax returns' is wrong because the six items are sufficient; tax returns are additional documentation that may be requested later. 'Only a prequalification, regardless of the information received' is wrong; if the six items are received, it's an application for TRID purposes, even if the creditor calls it a prequalification. 'Consummation of the loan' is wrong; consummation is the closing when the borrower becomes contractually obligated, which occurs much later. Exam tip: Memorize the six application elements. Their receipt starts the Loan Estimate clock, regardless of what the creditor calls the process.
Why This Is the Correct Answer
Why this is correct: Under TRID, an application is defined as the submission of six specific pieces of information: name, income, Social Security number, property address, estimated property value, and loan amount. Receipt of these six items triggers the creditor's obligation to provide a Loan Estimate within three business days. Why the other choices are wrong: 'Nothing until the consumer submits tax returns' is wrong because the six items are sufficient; tax returns are additional documentation that may be requested later. 'Only a prequalification, regardless of the information received' is wrong; if the six items are received, it's an application for TRID purposes, even if the creditor calls it a prequalification. 'Consummation of the loan' is wrong; consummation is the closing when the borrower becomes contractually obligated, which occurs much later. Exam tip: Memorize the six application elements. Their receipt starts the Loan Estimate clock, regardless of what the creditor calls the process.
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