A secondary-market loan delivery raises a question about secondary-market loan delivery. Which action should the branch supervisor recommend?
Correct Answer
C) Apply investor eligibility before selling the loan
Why this is correct: Before a loan can be sold on the secondary market, it must meet the specific eligibility criteria of the investor (e.g., Fannie Mae's Selling Guide). This includes credit, property, documentation, and compliance standards. Applying these rules upfront ensures the loan is deliverable. The original explanation correctly ties secondary market roles to eligibility. Why the other choices are wrong: "Apply a different loan-program rule without checking the file facts" is wrong because investor eligibility is fact-specific and must be verified from the file. "Apply the advertising disclosure timing rule even though the file is testing Secondary Market Operations" is wrong because advertising rules (Regulation Z) are unrelated to the operational steps of loan delivery. "Use the same treatment for all mortgage products without comparing program requirements" is wrong because different investors have different eligibility requirements (e.g., conforming vs. jumbo). Exam tip: Prior to closing, underwrite the loan to the specific investor's guidelines to avoid buy-back risk after delivery.
Why This Is the Correct Answer
The correct response is "Apply investor eligibility before selling the loan" because Secondary-market participants buy, guarantee, pool, or securitize loans under different roles.
Why the Other Options Are Wrong
Option A: Apply a different loan-program rule without checking the file facts.
Apply a different loan-program rule without checking the file facts. is not correct because it does not apply the rule tested by this file scenario.
Option B: Apply the advertising disclosure timing rule even though the file is testing Secondary Market Operations.
This distractor shifts the issue to a different trigger, product, or timing rule instead of applying the rule tested in the stem.
Option D: Use the same treatment for all mortgage products without comparing program requirements.
Use the same treatment for all mortgage products without comparing program requirements. is not correct because it does not apply the rule tested by this file scenario.
Memory Technique
secondary-market loan delivery: 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 secondary-market loan delivery; 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
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