A covered loan is scheduled to consummate, but the consumer received the Closing Disclosure only one business day earlier. No emergency waiver applies. What should the creditor do?
Correct Answer
B) Delay consummation until the three-business-day Closing Disclosure review period is satisfied
Why this is correct: TRID rules mandate a specific waiting period between providing the Closing Disclosure and consummation. The consumer must receive the Closing Disclosure at least three business days before closing. Receiving it only one business day earlier violates this rule, so the creditor must delay consummation to satisfy the full three-business-day review period, unless a rare bona fide personal financial emergency waiver applies. Why the other choices are wrong: The choice "Consummate because the Loan Estimate was timely" is wrong because the Loan Estimate and Closing Disclosure have separate timing rules; a timely Loan Estimate does not excuse a late Closing Disclosure. The choice "Replace the Closing Disclosure with an oral summary" is wrong because the disclosure must be provided in writing; an oral summary is not compliant. The choice "Obtain the real estate agent's waiver" is wrong because a real estate agent cannot waive the consumer's legal right to the three-day review period. Exam tip: The three-business-day rule for the Closing Disclosure is strict. Count business days carefully, excluding Sundays and federal holidays. The clock starts when the consumer is deemed to have received the disclosure, not when it is sent.
Why This Is the Correct Answer
Why this is correct: TRID rules mandate a specific waiting period between providing the Closing Disclosure and consummation. The consumer must receive the Closing Disclosure at least three business days before closing. Receiving it only one business day earlier violates this rule, so the creditor must delay consummation to satisfy the full three-business-day review period, unless a rare bona fide personal financial emergency waiver applies. Why the other choices are wrong: The choice "Consummate because the Loan Estimate was timely" is wrong because the Loan Estimate and Closing Disclosure have separate timing rules; a timely Loan Estimate does not excuse a late Closing Disclosure. The choice "Replace the Closing Disclosure with an oral summary" is wrong because the disclosure must be provided in writing; an oral summary is not compliant. The choice "Obtain the real estate agent's waiver" is wrong because a real estate agent cannot waive the consumer's legal right to the three-day review period. Exam tip: The three-business-day rule for the Closing Disclosure is strict. Count business days carefully, excluding Sundays and federal holidays. The clock starts when the consumer is deemed to have received the disclosure, not when it is sent.
More Origination Questions
Before the team acts on a servicing handoff check, a closing coordinator must address Asset Verification and Reserves. Which response is most defensible?
An MLO is reviewing procedures for a case where a cost changes after the Closing Disclosure has already been provided. What is the proper handling?
During a post-application update, a quality-control reviewer encounters a Credit Analysis and Evaluation issue. Which response should avoid a shortcut that would misapply the rule?
A construction-to-permanent loan will disburse in 5 draws over 11 months before the permanent phase begins. Which Regulation Z appendix provides a disclosure method for multiple-advance construction transactions?
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?
A construction loan agreement allows advances only after documented completion of specified work. A builder requests the next draw, but no completion evidence has been provided. What should occur?
Before releasing the final construction draw, which combination most directly supports project completion and clear collateral?
A construction-to-permanent loan will convert to a substantially higher fully amortizing payment. Which payment is especially important when assessing the borrower's long-term repayment capacity?
A construction-to-permanent note states that conversion requires completion, a certificate of occupancy, and no unresolved liens. Construction is finished, but a mechanic's lien remains. What should happen?
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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