A mortgage file is paused because the interest rate was locked after the initial Loan Estimate. Which answer should resolve the disclosure issue before the file moves forward?
Correct Answer
A) Provide the revised Loan Estimate within three business days of lock
Why this is correct: When the consumer locks the interest rate after the initial Loan Estimate, the creditor may issue a revised Loan Estimate reflecting the locked terms and must provide it within three business days after the lock. Why the other choices are wrong: A float-down is not automatic, an internal underwriting delay does not erase lock terms, and an unrelated refinance rule does not address the disclosure. Exam tip: A consumer-requested rate lock can support a revised Loan Estimate; deliver it within three business days.
Why This Is the Correct Answer
The correct response is "Provide the revised Loan Estimate within three business days of lock" because Rate locks can require revised Loan Estimates and accurate interest-rate-dependent disclosures.
Why the Other Options Are Wrong
Option B: Treat a float-down as automatic when the lock agreement does not provide it.
This choice is not the best answer because it applies the wrong file step for rate-lock documentation; the governing rule is tested by the correct option.
Option C: Ignore the lock expiration because underwriting delay was internal.
This choice is a tempting shortcut, but it conflicts with rate-lock documentation because the file still needs the required documentation, timing, or rule-based review before the action is taken.
Option D: Apply the refinance benefit timing rule even though the file is testing TILA ARM Disclosures.
This distractor shifts the issue to a different trigger, product, or timing rule instead of applying the rule tested in the stem.
Memory Technique
rate-lock agreements: identify the rule being tested, then choose the action that documents or applies that rule before the file moves forward.
Exam Tip
For rate-lock documentation 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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