A borrower receives the special flood hazard notice at the closing table with no earlier delivery. What is the principal compliance concern?
Correct Answer
A) The notice may not have been provided a reasonable time before completion
Why this is correct: The correct answer is "The notice may not have been provided a reasonable time before completion." The rule requires the special flood hazard notice to be delivered a reasonable time before loan closing. This allows the borrower sufficient time to understand the flood hazard and secure required insurance. Providing it only at the closing table may violate this "reasonable time" requirement. Why the other choices are wrong: "Flood notices are allowed only after closing" is wrong; the notice must be provided before closing. "The notice must always be delivered exactly 45 days before closing" is incorrect; the 45-day period applies to force placement notices, not the initial special flood hazard notice. "Written notice is prohibited" is false; written notice is required. Exam tip: Distinguish between the "reasonable time" requirement for the initial notice and the specific 45-day period for force placement notices after closing.
Why This Is the Correct Answer
Why this is correct: The correct answer is "The notice may not have been provided a reasonable time before completion." The rule requires the special flood hazard notice to be delivered a reasonable time before loan closing. This allows the borrower sufficient time to understand the flood hazard and secure required insurance. Providing it only at the closing table may violate this "reasonable time" requirement. Why the other choices are wrong: "Flood notices are allowed only after closing" is wrong; the notice must be provided before closing. "The notice must always be delivered exactly 45 days before closing" is incorrect; the 45-day period applies to force placement notices, not the initial special flood hazard notice. "Written notice is prohibited" is false; written notice is required. Exam tip: Distinguish between the "reasonable time" requirement for the initial notice and the specific 45-day period for force placement notices after closing.
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