A processor handoff raises a TILA Closing Disclosure Requirements question for a disclosure specialist. What answer should guide the file?
Correct Answer
C) Delay closing until required documents are complete
Why this is correct: The Truth in Lending Act (TILA) mandates that the Closing Disclosure be provided to the consumer at least three business days before consummation (closing). This waiting period allows the borrower to review the final terms and costs. If required documents, including the correct Closing Disclosure, are not complete, the loan cannot legally close. Therefore, the specialist must delay closing until all required documents are in order. Why the other choices are wrong: "Apply a different loan-program rule without checking the file facts" is wrong because it suggests an improper, arbitrary action instead of following the specific TILA timing rule. "Delay the TILA Closing Disclosure Requirements step until a later HMDA reporting review instead of acting now" is wrong because HMDA reporting is a separate post-closing activity; delaying the mandatory pre-closing disclosure violates TILA and would prevent closing. "Use the same treatment for all mortgage products without comparing program requirements" is wrong because disclosure timing and requirements can differ between open-end and closed-end credit, for example. Exam tip: Remember the "3-day rule" for the Closing Disclosure. It's a hard deadline; missing it means you must delay closing.
Why This Is the Correct Answer
The correct response is "Delay closing until required documents are complete" because Closing requires correct disclosures, title documents, signatures, and settlement charges before consummation.
Why the Other Options Are Wrong
Option A: Apply a different loan-program rule without checking the file facts.
Apply a different loan-program rule without checking the file facts. is not correct because it does not apply the rule tested by this file scenario.
Option B: Delay the TILA Closing Disclosure Requirements step until a later HMDA reporting 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: Use the same treatment for all mortgage products without comparing program requirements.
Use the same treatment for all mortgage products without comparing program requirements. is not correct because it does not apply the rule tested by this file scenario.
Memory Technique
TILA Closing Disclosure Requirements: 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 TILA Closing Disclosure Requirements; 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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