A branch manager asks about a loan file because a first-lien appraisal is complete before closing. What should happen?
Correct Answer
A) Provide valuation copies promptly or three business days before closing
Why this is correct: The correct action is mandated by Regulation B (the governing federal rule When a first-lien appraisal for a dwelling is completed, the creditor must provide a copy to the borrower. The rule requires delivery promptly after completion or at least three business days before consummation (closing), whichever is earlier. This ensures the borrower has the information in time to review it before closing. Why the other choices are wrong: "Use prior construction draw approval as a substitute for the current ECOA appraisal and valuation copies requirement" is wrong because a previous approval for a different purpose does not satisfy this specific, timed disclosure obligation. "Wait until a regulator asks for the file before applying the federal requirement" is wrong because this is a pre-closing requirement; waiting is a clear violation. "Rely on oral agreement when the rule requires documented compliance" is wrong because providing the copy is a tangible action; an oral agreement does not constitute delivery of the written valuation. Exam tip: The ECOA appraisal copy rule is triggered by completion of the appraisal, not by closing. Act as soon as it's complete to meet the 'promptly' standard.
Why This Is the Correct Answer
The correct response is "Provide valuation copies promptly or three business days before closing" because Lines 42-54; 12 CFR 1002.14(a)(1).
Why the Other Options Are Wrong
Option B: Use prior construction draw approval as a substitute for the current ECOA appraisal and valuation copies 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: 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: Rely on oral agreement when the rule requires documented compliance.
Rely on oral agreement when the rule requires documented compliance. is not correct because it does not apply the rule tested by this file scenario.
Memory Technique
ECOA and Regulation B: 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 ECOA and Regulation B; 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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