A mortgage file is paused during a secondary-market screen because of Temporary Authority Expiration. Which answer should identify which rule controls the file?
Correct Answer
C) Stop temporary authority when the application is denied or withdrawn
Why this is correct: The rule controlling Temporary Authority is defined by its specific start and end events. The original explanation notes temporary authority has eligibility limits and an end event. A fundamental rule is that temporary authority ends when the application is denied or withdrawn. Therefore, "Stop temporary authority when the application is denied or withdrawn" correctly identifies the controlling rule for the file's status. Why the other choices are wrong: "Use prior experience as a substitute for the required rule" is wrong because temporary authority rules are statutory and cannot be overridden by experience. "Apply the document-retention timing rule even though the file is testing Temporary Authority Expiration" is wrong as it applies an irrelevant procedural rule (how long to keep records) to a substantive licensing status issue. "Treat the requirement as optional because the file appears low risk" is wrong because temporary authority rules are mandatory, not risk-based. Exam tip: Temporary authority is not permanent. Key end events are denial, withdrawal, licensure, or the 120-day mark. Always stop authority upon denial or withdrawal.
Why This Is the Correct Answer
The correct response is "Stop temporary authority when the application is denied or withdrawn" because Temporary authority has eligibility limits, start and end events, and a 120-day outer period.
Why the Other Options Are Wrong
Option A: Use prior experience as a substitute for the required rule.
Use prior experience as a substitute for the required rule. is not correct because it does not apply the rule tested by this file scenario.
Option B: Apply the document-retention timing rule even though the file is testing Temporary Authority Expiration.
This distractor shifts the issue to a different trigger, product, or timing rule instead of applying the rule tested in the stem.
Option D: Treat the requirement as optional because the file appears low risk.
Treat the requirement as optional because the file appears low risk. is not correct because it does not apply the rule tested by this file scenario.
Memory Technique
temporary authority: 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 temporary authority; 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
More UST Questions
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