A customer-service escalation raises a TRID Transaction Types question for a quality-control reviewer. What answer should guide the file?
Correct Answer
A) Classify the transaction type before applying the rule
Why this is correct: TRID (TILA-RESPA Integrated Disclosure) rules, including which disclosures are required and their timing, depend heavily on correctly identifying the transaction type (e.g., purchase, refinance, cash-out). Applying the correct rule requires this classification as a first step. Why the other choices are wrong: - "Apply a different loan-program rule without checking the file facts" is wrong because applying a rule without verifying the transaction type against the file facts can lead to using the wrong disclosure requirements. - "Ignore product, occupancy, LTV, or eligibility limits because the borrower prefers the loan" is wrong because TRID disclosure obligations are based on transaction type and are not waived by borrower preference. - "Use the same treatment for all mortgage products without comparing program requirements" is wrong because TRID requirements vary by transaction type; a one-size-fits-all approach is non-compliant. Exam tip: Always determine the transaction type (purchase, refi, etc.) first. This is the cornerstone for applying correct TRID disclosure rules.
Why This Is the Correct Answer
The correct response is "Classify the transaction type before applying the rule" because Purchase, refinance, cash-out, construction, and home-equity transactions have different disclosure and risk rules.
Why the Other Options Are Wrong
Option B: 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 C: Ignore product, occupancy, LTV, or eligibility limits because the borrower prefers the loan.
Ignore product, occupancy, LTV, or eligibility limits because the borrower prefers the loan. is not correct because it does not apply the rule tested by this file scenario.
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
TRID Transaction Types: 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 TRID Transaction Types; 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
More Mortgage Knowledge Questions
In a closing-readiness check, a risk reviewer sees facts tied to TILA Truth in Advertising. What should the file reflect?
In a training scenario, a trainee asks which official source controls FHA single-family origination policy. What action best follows the rule?
A compliance analyst compares the file facts with LTV Ratio Calculation during a licensing team review. Which conclusion is accurate?
A branch manager asks about a loan file because a trainee asks which official source controls FHA single-family origination policy. What should happen?
The loan team compares the file facts with ARM Cap Structures during a borrower follow-up call. Which conclusion is accurate?
A borrower has a 30-year fixed-rate mortgage with monthly principal and interest of $1,450. Property taxes increase, and taxes are paid through escrow. What can happen to the total monthly payment?
A loan has an outstanding principal balance of $240,000 and a 6% annual interest rate. Using simple monthly accrual, how much interest accrues for one month?
An annual escrow analysis for a current borrower shows a $780 shortage. One month's escrow payment is $600. The servicer elects to require repayment over the shortest installment period permitted by Regulation X for this shortage. What schedule is permitted?
What does an amortization schedule show for each scheduled payment?
A monthly principal-and-interest payment is $1,800, of which $1,250 is interest. How much principal is paid that month?
People Also Study
Federal Mortgage-Related Laws
24% of exam
Mortgage Loan Origination Activities
27% of exam
Ethics, Fraud & Consumer Protection
18% of exam
Uniform State Test Content
11% of exam
Related Study Resources
Previous Question
Which change causes negative amortization?
Next Question
An ordinary FHA Title II forward purchase mortgage has a correctly determined Minimum Decision Credit Score of 562. Assume the applicable purchase price and adjusted-value base are both $280,000, no special-program exception applies, and all other requirements are met. What minimum down payment results from the score-based 90% maximum base-loan LTV, excluding mortgage insurance and other closing costs?