A lender orders a second appraisal after the first comes in low, and provides the borrower only the second one, which supported the value. What does the rule require?
Correct Answer
B) Provide valuation copies promptly or three business days before closing
Why this is correct: Under Regulation B (the governing federal rule, when a first-lien appraisal is completed before closing, the creditor must provide a copy to the applicant promptly or three business days before closing, whichever is earlier. This is a mandatory step. Why the other choices are wrong: "Use an internal exception instead of the required federal disclosure or timing rule" is wrong because federal rules take precedence; no internal exception is allowed. "Delay the ECOA appraisal and valuation copies step until a later licensing review instead of acting now" is wrong because the timing requirement is tied to closing, not a future review. "Rely on oral agreement when the rule requires documented compliance" is wrong because Regulation B requires providing a physical or electronic copy of the written valuation, not just oral notice. Exam tip: The 'promptly or three days' rule is a key ECOA timing test. Mark it as a pre-closing checklist item.
Why This Is the Correct Answer
The correct response is "Provide valuation copies promptly or three business days before closing" because Lines 42-54; 12 CFR 1002.14(a)(1).
Why the Other Options Are Wrong
Option A: Use an internal exception instead of the required federal disclosure or timing rule.
Use an internal exception instead of the required federal disclosure or timing rule. is not correct because it does not apply the rule tested by this file scenario.
Option C: Delay the ECOA appraisal and valuation copies step until a later licensing review instead of acting now.
This distractor shifts the issue to a different trigger, product, or timing rule instead of applying the rule tested in the stem.
Option D: Rely on oral agreement when the rule requires documented compliance.
Rely on oral agreement when the rule requires documented compliance. is not correct because it does not apply the rule tested by this file scenario.
Memory Technique
ECOA and Regulation B: 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 ECOA and Regulation B; 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
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