Before the team acts on a servicing handoff check, an audit analyst must address TRID Loan Estimate Revisions. Which response is most defensible?
Correct Answer
D) Do not revise estimates without a valid trigger
Why this is correct: Regulation Z (TRID) strictly limits when a Loan Estimate (LE) can be revised. A revised LE can only be issued if a valid "changed circumstance" or other triggering event (like borrower request, expiration) occurs. Issuing a revised LE without a valid, documented trigger is a violation. Therefore, you must not revise estimates without a valid trigger. Why the other choices are wrong: "Ignore redisclosure timing because the borrower verbally accepted the new terms" is wrong because TRID has specific timing rules for providing revised disclosures (e.g., within 3 business days of the event); verbal acceptance does not waive these legal requirements. "Increase disclosed costs based on an internal pricing preference without file-specific support" is wrong because cost increases generally require a valid reason (like a changed circumstance); arbitrary increases based on preference are not permitted. "Use the revised Loan Estimate only to improve pricing after the borrower shops a competitor" is wrong because a revised LE cannot be used strategically to beat a competitor's offer; it can only be issued for permitted reasons like a changed circumstance. Exam tip: Memorize the common valid "changed circumstances": information discovered to be inaccurate, new information (e.g., different property value), and borrower-requested changes. No trigger, no revision.
Why This Is the Correct Answer
The correct response is "Do not revise estimates without a valid trigger" because Changed circumstances can permit revised estimates only when Regulation Z conditions and timing are met.
Why the Other Options Are Wrong
Option A: Ignore redisclosure timing because the borrower verbally accepted the new terms.
This choice is a tempting shortcut, but it conflicts with changed-circumstance documentation because the file still needs the required documentation, timing, or rule-based review before the action is taken.
Option B: Increase disclosed costs based on an internal pricing preference without file-specific support.
This choice is a tempting shortcut, but it conflicts with changed-circumstance documentation because the file still needs the required documentation, timing, or rule-based review before the action is taken.
Option C: Use the revised Loan Estimate only to improve pricing after the borrower shops a competitor.
This choice is a tempting shortcut, but it conflicts with changed-circumstance documentation because the file still needs the required documentation, timing, or rule-based review before the action is taken.
Memory Technique
changed-circumstance review: identify the rule being tested, then choose the action that documents or applies that rule before the file moves forward.
Exam Tip
For changed-circumstance 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?
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?
People Also Study
Federal Mortgage-Related Laws
24% of exam
General Mortgage Knowledge
20% of exam
Ethics, Fraud & Consumer Protection
18% of exam
Uniform State Test Content
11% of exam
Related Study Resources
Previous Question
An escrow analysis shows a $310 shortage when the monthly escrow payment is $600. The borrower is current. If the servicer chooses the equal-monthly-installment repayment option under Regulation X, what is its minimum repayment period?
Next Question
Before the team acts on a production meeting, a quality-control reviewer must address Reserve Requirements. Which response is most defensible?