A risk reviewer is resolving TILA Advertising Requirements during a quality-control sample. Which action best fits the rule?
Correct Answer
A) Advertise only terms actually available
Why this is correct: The original explanation states that mortgage advertisements must be truthful and include required disclosures. A core TILA advertising rule is that advertised terms must be actually available to consumers. Misleading ads that promote terms not genuinely available are prohibited. Why the other choices are wrong: "Use an internal exception instead of the required federal disclosure or timing rule" is wrong because advertising rules are federal mandates, not subject to internal waiver. "Wait until a regulator asks for the file before applying the federal requirement" is wrong because advertising compliance is required before publication, not upon regulatory inquiry. "Rely on oral agreement when the rule requires documented compliance" is wrong because advertising claims must be substantiated and clear in the ad itself. Exam tip: In TILA advertising, if an ad states specific credit terms (like a rate), those terms must be what the consumer can actually obtain.
Why This Is the Correct Answer
The correct response is "Advertise only terms actually available" because Mortgage advertisements must be truthful and include required APR or trigger-term disclosures.
Why the Other Options Are Wrong
Option B: 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: Wait until a regulator asks for the file before applying the federal requirement.
Wait until a regulator asks for the file before applying the federal requirement. is not correct because it does not apply the rule tested by this file scenario.
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
TILA advertising: 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 advertising; 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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