During a training quiz scenario, a policy analyst encounters a Rate Lock Provisions issue. Which response should select the answer that fits the governing requirement?
Correct Answer
C) Use a corrected Closing Disclosure if the lock occurs after the CD
Why this is correct: The governing concept is that accurate disclosures must reflect the final loan terms. If a rate is locked after the initial Closing Disclosure (CD) is issued, the terms have changed, requiring a corrected CD to ensure the borrower receives accurate, binding disclosures before consummation. This aligns with TRID rules that mandate disclosures reflect the actual terms of the transaction. Why the other choices are wrong: "Move the file to closing without resolving a known lock-expiration conflict" is wrong because proceeding with a conflict violates good faith disclosure requirements and risks providing incorrect terms. "Assume the borrower accepted lock changes because the payment is lower" is wrong because borrower acceptance of any change must be documented and affirmative; assumptions are non-compliant. "Change locked terms without documenting the lock agreement and borrower authorization" is wrong because any change to locked terms requires proper documentation and explicit borrower authorization to be valid. Exam tip: Remember that a rate lock is a material event; any lock or change occurring after a disclosure has been issued typically triggers a revised disclosure to maintain accuracy.
Why This Is the Correct Answer
The correct response is "Use a corrected Closing Disclosure if the lock occurs after the CD" because Rate locks can require revised Loan Estimates and accurate interest-rate-dependent disclosures.
Why the Other Options Are Wrong
Option A: Move the file to closing without resolving a known lock-expiration conflict.
This choice is a tempting shortcut, but it conflicts with rate-lock documentation because the file still needs the required documentation, timing, or rule-based review before the action is taken.
Option B: Assume the borrower accepted lock changes because the payment is lower.
This choice is not the best answer because it applies the wrong file step for rate-lock documentation; the governing rule is tested by the correct option.
Option D: Change locked terms without documenting the lock agreement and borrower authorization.
This choice is a tempting shortcut, but it conflicts with rate-lock documentation because the file still needs the required documentation, timing, or rule-based review before the action is taken.
Memory Technique
rate-lock agreements: identify the rule being tested, then choose the action that documents or applies that rule before the file moves forward.
Exam Tip
For rate-lock documentation 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
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?
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