A $412,000 file is identified as a higher-priced mortgage loan two days before its scheduled closing. The team asks which additional duties now attach to it, and whether any of them can be met that late.

Correct Answer

B) Check escrow and appraisal duties for a covered HPML

Why this is correct: The question involves a High-Priced Mortgage Loan (HPML) requirements review. HPMLs are defined under Regulation Z by comparing the loan's Annual Percentage Rate (APR) to the Average Prime Offer Rate (APOR). If a loan is an HPML, it triggers specific federal protections, including mandatory escrow accounts for property taxes and insurance for most first-lien mortgages, and special appraisal requirements. The correct action, "Check escrow and appraisal duties for a covered HPML," directly addresses the core compliance step: verifying if the loan is an HPML and, if so, ensuring the associated escrow and appraisal rules are followed. Why the other choices are wrong: "Delay the TILA HPML Requirements step until a later construction draw review instead of acting now" is wrong because HPML requirements are triggered at origination and cannot be lawfully postponed. "Wait until a regulator asks for the file before applying the federal requirement" is non-compliant, as rules must be applied proactively. "Rely on oral agreement when the rule requires documented compliance" is incorrect because HPML rules, like escrow agreements, require written documentation. Exam tip: For HPML questions, remember the two key triggers: APR-over-APOR thresholds and loan-type coverage. Your immediate action is always to verify coverage and then apply the specific escrow and appraisal rules.