A compliance exception review raises a Settlement Procedures and Costs question for the loan team. What answer should guide the file?
Correct Answer
B) Resolve title or signature issues before consummation
Why this is correct: The Real Estate Settlement Procedures Act (RESPA) and TRID require that closing be conducted with accurate and complete documentation. Resolving title issues (e.g., clearing liens) and ensuring proper signatures are prerequisites for a legally enforceable consummation. The original explanation correctly identifies these as required steps before closing. Why the other choices are wrong: "Apply a different loan-program rule without checking the file facts" is wrong because settlement procedures must be applied based on the actual loan file. "Ignore product, occupancy, LTV, or eligibility limits because the borrower prefers the loan" is wrong because borrower preference does not override legal underwriting and closing requirements. "Delay the Settlement Procedures and Costs step until a later escrow analysis review instead of acting now" is wrong because RESPA/TRID disclosures and the closing process have strict timing; delays can violate the rule and jeopardize the closing. Exam tip: Before consummation, verify that all title defects are cured and all necessary documents are properly executed. This is a core pre-closing duty.
Why This Is the Correct Answer
The correct response is "Resolve title or signature issues before consummation" 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 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: Delay the Settlement Procedures and Costs step until a later escrow analysis 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.
Memory Technique
Settlement Procedures and Costs: 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 Settlement Procedures and Costs; 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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