In a file escalation meeting, a policy analyst sees facts tied to TILA Disclosure Requirements. What should the file reflect?
Correct Answer
B) Document material borrower communications
Why this is correct: TILA and related regulations require accurate and timely disclosures. A core practice to demonstrate compliance is to document all material communications with the borrower. This creates an audit trail showing that required information was provided and any borrower inquiries or decisions were recorded. Why the other choices are wrong: "Delay the early disclosure until underwriting has confirmed the borrower income" is wrong because early disclosures (like the Loan Estimate) have specific timing triggers, often tied to application receipt, and cannot be delayed for underwriting verification. "Collect only verbal consent and send the written notice after the rate is locked" is wrong because many consents (e.g., for locking) require written authorization; verbal consent is insufficient. "Use an informal worksheet in place of the required written disclosure" is wrong because TILA mandates specific, formal written disclosures; informal worksheets do not satisfy this legal requirement. Exam tip: When in doubt about TILA compliance, remember the three T's: Timely, in Writing, and Documented.
Why This Is the Correct Answer
The correct response is "Document material borrower communications" because Borrower communication must be timely, accurate, and tied to disclosure or action-notice duties.
Why the Other Options Are Wrong
Option A: Delay the early disclosure until underwriting has confirmed the borrower income.
This choice is not the best answer because it applies the wrong file step for borrower communication and early-disclosure timing; the governing rule is tested by the correct option.
Option C: Collect only verbal consent and send the written notice after the rate is locked.
This choice is a tempting shortcut, but it conflicts with borrower communication and early-disclosure timing because the file still needs the required documentation, timing, or rule-based review before the action is taken.
Option D: Use an informal worksheet in place of the required written disclosure.
This choice is a tempting shortcut, but it conflicts with borrower communication and early-disclosure timing because the file still needs the required documentation, timing, or rule-based review before the action is taken.
Memory Technique
TILA Disclosure Requirements: identify the rule being tested, then choose the action that documents or applies that rule before the file moves forward.
Exam Tip
For borrower communication and early-disclosure timing 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
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