A borrower-facing employee is unsure what to do when a closing is approaching and the borrower has not yet received the Closing Disclosure. What is the correct response?
Correct Answer
C) Ensure receipt three business days before consummation
Why this is correct: The fundamental TRID timing rule is that the consumer must receive the Closing Disclosure at least three business days before loan consummation (the governing federal rule This allows for review of final terms. Therefore, the correct action is to ensure receipt three business days before consummation. Why the other choices are wrong: "Treat a changed provider fee as unlimited solely because it is paid to a third party" is wrong because while some third-party fees can change more freely under certain conditions, not all are unlimited; the change must be due to a specific reason like consumer selection. "Treat the Closing Disclosure timing review as complete because the file contains a related rate-lock note" is wrong because a rate-lock note does not substitute for or prove receipt of the Closing Disclosure; the timing rule is independent. "Cure a tolerance problem by renaming the fee instead of documenting or refunding the variance" is wrong because renaming a fee is not a compliant cure method; tolerance violations require either a valid reason for the increase (like a changed circumstance) or a refund to the borrower. Exam tip: 'Receipt' means the borrower gets it. Use methods that provide proof of delivery to comply with the three-day rule.
Why This Is the Correct Answer
The correct response is "Ensure receipt three business days before consummation". The Closing Disclosure is a pre-consummation disclosure, so receipt must occur at least three business days before consummation.
Why the Other Options Are Wrong
Option A: Treat a changed provider fee as unlimited solely because it is paid to a third party.
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 B: Treat the Closing Disclosure timing review as complete because the file contains a related rate-lock note.
This distractor shifts the issue to a different trigger, product, or timing rule instead of applying the rule tested in the stem.
Option D: 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.
Memory Technique
Closing Disclosure means three business days before consummation.
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
- -Closing Disclosure timing is not satisfied by same-day delivery at settlement.
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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