Before the loan advances, a training manager must resolve a TRID Closing Disclosure timing issue in a new-license application. What should happen?
Correct Answer
B) Use a corrected Closing Disclosure when terms change
Why this is correct: Under TRID (Regulation Z and X), the lender must ensure the borrower receives the Closing Disclosure at least three business days before consummation. If a change in terms occurs that triggers a new three-day waiting period, a corrected Closing Disclosure must be provided. The correct answer, "Use a corrected Closing Disclosure when terms change," is the legally required procedure to maintain compliance and ensure the borrower has accurate, timely information. Why the other choices are wrong: "Use an internal exception instead of the required federal disclosure or timing rule" is wrong because federal timing rules are mandatory. "Wait until a regulator asks for the file before applying the federal requirement" is wrong as it describes a reactive, non-compliant approach; compliance must be proactive. "Use the consumer complaint standard to decide the TRID Closing Disclosure Timing issue before confirming the trigger facts" is wrong because the timing rule is objective and fact-based, not dependent on whether a complaint has been filed. Exam tip: The 'three-business-day' rule is sacred in TRID. Any change that increases the APR beyond a tolerance, adds a prepayment penalty, or changes the loan product requires a new Closing Disclosure and resets the waiting period.
Why This Is the Correct Answer
The correct response is "Use a corrected Closing Disclosure when terms change" because The Closing Disclosure must be received in time and corrected under Regulation Z rules.
Why the Other Options Are Wrong
Option A: 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: Use the consumer complaint standard to decide the TRID Closing Disclosure Timing issue before confirming the trigger facts.
This distractor shifts the issue to a different trigger, product, or timing rule instead of applying the rule tested in the stem.
Memory Technique
TRID Closing Disclosure timing: 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 Closing Disclosure timing; 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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