A file review raises a question about TILA advertising. Which action should the audit analyst recommend?
Correct Answer
B) Remove misleading mortgage-advertising claims
Why this is correct: TILA's advertising rules prohibit misleading claims in mortgage advertisements. If an advertisement contains a claim that is untrue or creates a false impression, it must be corrected or removed to ensure compliance. The correct answer, "Remove misleading mortgage-advertising claims," is the direct and required action. Why the other choices are wrong: "Use prior changed-circumstance approval as a substitute for the current TILA Advertising Requirements requirement" is wrong because changed-circumstance rules apply to Loan Estimates, not to the fundamental truthfulness of advertisements. "Wait until a regulator asks for the file before applying the federal requirement" is wrong because misleading ads must be corrected immediately upon discovery. "Rely on oral agreement when the rule requires documented compliance" is wrong because advertising compliance requires written records and disclosures. Exam tip: All mortgage advertisements, including online and social media posts, must comply with TILA's truth-in-advertising standards. Misleading claims are illegal regardless of the medium.
Why This Is the Correct Answer
The correct response is "Remove misleading mortgage-advertising claims" because Mortgage advertisements must be truthful and include required APR or trigger-term disclosures.
Why the Other Options Are Wrong
Option A: Use prior changed-circumstance approval as a substitute for the current TILA Advertising Requirements 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
TILA advertising: 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 TILA advertising; 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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