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A mortgage file is paused during a policy refresh meeting because of ARM Rate Caps. Which answer should resolve the issue before the file moves forward?

Correct Answer

C) Update rate-dependent terms after the lock

Rate locks can require revised Loan Estimates and accurate interest-rate-dependent disclosures. The best answer is "Update rate-dependent terms after the lock".

Answer Options
A
Change locked terms without documenting the lock agreement and borrower authorization.
B
Treat a float-down as automatic when the lock agreement does not provide it.
C
Update rate-dependent terms after the lock
D
Apply the servicing transfer timing rule even though the file is testing ARM Rate Caps.

Why This Is the Correct Answer

Rate locks can require revised Loan Estimates and accurate interest-rate-dependent disclosures. The best answer is "Update rate-dependent terms after the lock".

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