A creditor receives all six TRID application elements on Monday and does not deny the application. By when must it generally deliver or mail the Loan Estimate?
Correct Answer
B) No later than three business days after receiving the application
Why this is correct: Under the TRID rule, a Loan Estimate must be delivered or placed in the mail no later than the third business day after the creditor receives the consumer's application. An application is triggered when the creditor receives six specific elements: name, income, Social Security number (to obtain a credit report), property address, estimated property value, and the loan amount sought. The clock starts when all six are received. Why the other choices are wrong: The choice "At consummation" is wrong because the Loan Estimate is an early disclosure required well before closing. The choice "Within 30 calendar days" is wrong; the rule is three business days, not 30 calendar days. The choice "Only after the appraisal is complete" is wrong because the creditor cannot wait for an appraisal or other documents to trigger the Loan Estimate obligation. Exam tip: The three-business-day deadline for the Loan Estimate is a hard rule. The six application elements are the trigger; receiving five does not start the clock.
Why This Is the Correct Answer
Why this is correct: Under the TRID rule, a Loan Estimate must be delivered or placed in the mail no later than the third business day after the creditor receives the consumer's application. An application is triggered when the creditor receives six specific elements: name, income, Social Security number (to obtain a credit report), property address, estimated property value, and the loan amount sought. The clock starts when all six are received. Why the other choices are wrong: The choice "At consummation" is wrong because the Loan Estimate is an early disclosure required well before closing. The choice "Within 30 calendar days" is wrong; the rule is three business days, not 30 calendar days. The choice "Only after the appraisal is complete" is wrong because the creditor cannot wait for an appraisal or other documents to trigger the Loan Estimate obligation. Exam tip: The three-business-day deadline for the Loan Estimate is a hard rule. The six application elements are the trigger; receiving five does not start the clock.
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?
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?
A branch manager asks about a loan file because a processor wants to omit known monthly obligations from underwriting. What should happen?
People Also Study
Federal Mortgage-Related Laws
24% of exam
General Mortgage Knowledge
20% of exam
Ethics, Fraud & Consumer Protection
18% of exam
Uniform State Test Content
11% of exam