Before closing, the team discovers that a late closing change occurs and the team must decide whether a new waiting period is required. What is the safest compliant answer?
Correct Answer
D) Restart the wait only for APR, product, or prepayment penalty changes
Why this is correct: The governing concept is which changes to a corrected Closing Disclosure trigger a new three-business-day waiting period before consummation. Under 12 CFR 1026.19(f)(2)(ii), only three specific changes require a new waiting period: an increase in the Annual Percentage Rate (APR), a change in the loan product, or the addition of a prepayment penalty. Why the other choices are wrong: "Leave the Loan Estimate unchanged after the creditor learns the disclosed charge is inaccurate" is wrong because an inaccurate charge generally requires a revised disclosure (Loan Estimate or corrected Closing Disclosure). "Cure a tolerance problem by renaming the fee instead of documenting or refunding the variance" is wrong because renaming a fee does not cure a tolerance violation; proper cures are refunding the excess or documenting a valid changed circumstance. "Assume the Corrected Closing Disclosure new waiting period condition is met because the borrower satisfied the separate loan estimate requirement" is wrong because the waiting period triggers for the Closing Disclosure are separate and specific; satisfaction of a Loan Estimate requirement does not waive the Closing Disclosure waiting period rules. Exam tip: Memorize the three triggers for a new waiting period after a corrected Closing Disclosure: APR increase, product change, or adding a prepayment penalty.
Why This Is the Correct Answer
The correct response is "Restart the wait only for APR, product, or prepayment penalty changes" because Lines 205-206; 12 CFR 1026.19(f)(2)(ii).
Why the Other Options Are Wrong
Option A: Leave the Loan Estimate unchanged after the creditor learns the disclosed charge is inaccurate.
This choice is not the best answer because it applies the wrong file step for fee disclosure and tolerance treatment; the governing rule is tested by the correct option.
Option B: Cure a tolerance problem by renaming the fee instead of documenting or refunding the variance.
This choice is a tempting shortcut, but it conflicts with fee disclosure and tolerance treatment because the file still needs the required documentation, timing, or rule-based review before the action is taken.
Option C: Assume the Corrected Closing Disclosure new waiting period condition is met because the borrower satisfied the separate loan estimate 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
Corrected Closing Disclosure new waiting period: identify the rule being tested, then choose the action that documents or applies that rule before the file moves forward.
Exam Tip
For fee disclosure and tolerance treatment questions, separate the required file step from plausible sales, timing, or documentation shortcuts.
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 Origination Questions
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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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