During an MLO sponsorship update, a policy analyst identifies an issue involving TILA Loan Estimate Timing. Which response is most compliant?
Correct Answer
B) Compare charges between the Loan Estimate and Closing Disclosure
Why this is correct: A core TRID requirement is comparing the final Closing Disclosure (CD) charges to the earlier Loan Estimate (LE) to check for tolerance violations and ensure fee accuracy. "Compare charges between the Loan Estimate and Closing Disclosure" is the essential, compliant step for fee reconciliation and curing any overages. Why the other choices are wrong: "Assume the TILA Loan Estimate Timing condition is met because the borrower satisfied the separate construction draw requirement" is wrong because TILA timing is a strict, independent requirement; satisfying a different condition does not fulfill it. "Move the fee to a different category to avoid a tolerance cure" is wrong because fee categorization is prescribed by rule; moving fees to circumvent tolerance limits is deceptive and non-compliant. "Increase a zero-tolerance charge because the borrower accepted the cost verbally" is wrong because zero-tolerance charges (like the credit report fee) cannot increase at all, regardless of borrower verbal agreement. Exam tip: For TRID fee questions, the correct action always involves proper comparison, categorization, and adherence to tolerance rules—never manipulating fees or assumptions.
Why This Is the Correct Answer
The correct response is "Compare charges between the Loan Estimate and Closing Disclosure" because TRID fee disclosures and tolerance categories govern estimates, revisions, and closing-cost comparison.
Why the Other Options Are Wrong
Option A: Assume the TILA Loan Estimate Timing condition is met because the borrower satisfied the separate construction draw requirement.
This distractor shifts the issue to a different trigger, product, or timing rule instead of applying the rule tested in the stem.
Option C: Move the fee to a different category to avoid a tolerance cure.
This choice is not the best answer because it applies the wrong file step for fee disclosure and tolerance treatment; the governing rule is tested by the correct option.
Option D: Increase a zero-tolerance charge because the borrower accepted the cost verbally.
This choice is a tempting shortcut, but it conflicts with fee disclosure and tolerance treatment because the file still needs the required documentation, timing, or rule-based review before the action is taken.
Memory Technique
TILA Loan Estimate Timing: identify the rule being tested, then choose the action that documents or applies that rule before the file moves forward.
Exam Tip
For fee disclosure and tolerance treatment questions, separate the required file step from plausible sales, timing, or documentation shortcuts.
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 Origination Questions
Before the team acts on a servicing handoff check, a closing coordinator must address Asset Verification and Reserves. Which response is most defensible?
An MLO is reviewing procedures for a case where a cost changes after the Closing Disclosure has already been provided. What is the proper handling?
During a post-application update, a quality-control reviewer encounters a Credit Analysis and Evaluation issue. Which response should avoid a shortcut that would misapply the rule?
Between the Loan Estimate and closing, prepaid interest increases $180, homeowner insurance increases $95, transfer taxes increase $40, and a credit report fee for which the consumer could not shop increases $12. There is no valid revised estimate or other exception. Which increases violate TRID's zero-tolerance rule?
A construction-to-permanent loan will disburse in 5 draws over 11 months before the permanent phase begins. Which Regulation Z appendix provides a disclosure method for multiple-advance construction transactions?
Before closing, the team discovers that a borrower asks which upfront charge can be collected before intent to proceed. What is the safest compliant answer?
A construction loan agreement allows advances only after documented completion of specified work. A builder requests the next draw, but no completion evidence has been provided. What should occur?
Before releasing the final construction draw, which combination most directly supports project completion and clear collateral?
A construction-to-permanent loan will convert to a substantially higher fully amortizing payment. Which payment is especially important when assessing the borrower's long-term repayment capacity?
A construction-to-permanent note states that conversion requires completion, a certificate of occupancy, and no unresolved liens. Construction is finished, but a mechanic's lien remains. What should happen?
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