A quality-control reviewer flags a case because a late closing change occurs and the team must decide whether a new waiting period is required. What correction is appropriate?
Correct Answer
D) Restart the wait only for APR, product, or prepayment penalty changes
Why this is correct: The rule, 12 CFR 1026.19(f)(2)(ii), is clear: a new three-business-day waiting period is required only when a Corrected Closing Disclosure is provided due to a change in the Annual Percentage Rate (APR), the loan product, or the addition of a prepayment penalty. The quality-control reviewer must apply this specific rule to correct the team's decision-making process. Why the other choices are wrong: 'Increase a zero-tolerance charge because the borrower accepted the cost verbally' is wrong because zero-tolerance charges cannot be increased for any reason, regardless of borrower consent. 'Apply the correct general concept to the wrong loan estimate stage rather than the Corrected Closing Disclosure new waiting period rule' is wrong because it misapplies disclosure timing rules; the question concerns the waiting period after a closing disclosure, not the initial Loan Estimate. 'Use the lowest advertised provider quote after a different provider has been selected' is wrong because it references a rule for service provider selection and does not address the waiting period trigger. Exam tip: For 'late closing change' questions, immediately check if the change is to APR, product, or prepayment penalty. If not, no new waiting period is required.
Why This Is the Correct Answer
The correct response is "Restart the wait only for APR, product, or prepayment penalty changes". Only the specified APR, product, or prepayment penalty changes trigger the new three business day waiting period.
Why the Other Options Are Wrong
Option A: Increase a zero-tolerance charge because the borrower accepted the cost verbally.
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: Apply the correct general concept to the wrong loan estimate stage rather than the Corrected Closing Disclosure new waiting period rule.
This distractor shifts the issue to a different trigger, product, or timing rule instead of applying the rule tested in the stem.
Option C: Use the lowest advertised provider quote after a different provider has been selected.
This choice is not the best answer because it applies the wrong file step for fee disclosure and tolerance treatment; the governing rule is tested by the correct option.
Memory Technique
Memorize the three restart triggers: APR, product, prepayment penalty.
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
- -Not every corrected Closing Disclosure creates a fresh waiting period.
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?
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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?
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Before releasing the final construction draw, which combination most directly supports project completion and clear collateral?
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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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