A team member asks about SCRA Coverage in an investor-delivery review while trying to choose the compliant next step. Which response should an operations lead use?
Correct Answer
D) Apply SCRA protections for eligible active-duty service
Why this is correct: The Servicemembers Civil Relief Act (SCRA) provides specific legal protections, such as interest rate caps and foreclosure stays, for eligible active-duty service members on obligations incurred before military service. When a file review identifies a potential SCRA-covered borrower, the compliant next step is to apply these statutory protections to ensure the loan terms and servicing actions are lawful. Why the other choices are wrong: "Use an internal exception instead of the required federal disclosure or timing rule" is wrong because SCRA is a federal statute; its protections cannot be waived by internal policy. "Wait until a regulator asks for the file before applying the federal requirement" is wrong because SCRA compliance is mandatory upon identifying an eligible service member, not contingent on regulatory review. "Assume the SCRA Coverage condition is met because the borrower satisfied the separate government-loan eligibility requirement" is wrong because SCRA eligibility is based on active-duty military status, not on meeting criteria for a government loan program like FHA or VA. Exam tip: SCRA protections are triggered by the borrower's military status, not by loan type. Always verify active-duty status to apply protections correctly.
Why This Is the Correct Answer
The correct response is "Apply SCRA protections for eligible active-duty service" because SCRA protects eligible servicemembers on covered obligations and foreclosure actions.
Why the Other Options Are Wrong
Option A: Use an internal exception instead of the required federal disclosure or timing rule.
Use an internal exception instead of the required federal disclosure or timing rule. is not correct because it does not apply the rule tested by this file scenario.
Option B: 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 C: Assume the SCRA Coverage condition is met because the borrower satisfied the separate government-loan eligibility requirement.
This distractor shifts the issue to a different trigger, product, or timing rule instead of applying the rule tested in the stem.
Memory Technique
SCRA borrower protections: 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 SCRA borrower protections; 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
More Federal Laws Questions
A mortgage file is paused during a lock-desk handoff because of FCRA Adverse Action Notices. Which answer should identify which rule controls the file?
Before the team acts on a production meeting, a training manager must address SCRA Interest Rate Cap. Which response is most defensible?
Before the team acts on a production meeting, the MLO must address FCRA Adverse Action Notice. Which response is most defensible?
A team member asks about RESPA Kickbacks and Referrals in an investor-delivery review while trying to confirm the rule-based response. Which response should the loan team use?
During a disclosure desk review, the loan team encounters an RESPA Servicing Transfer issue. Which response should avoid a shortcut that would misapply the rule?
A mortgage team asks a quality-control reviewer about TRID Loan Estimate timing during a record-retention audit. Which answer should guide the file?
A mortgage team asks a branch supervisor about TILA APR and finance-charge rules during a renewal checklist. Which answer should guide the file?
A mortgage file is paused during a risk-control review because of TILA QM DTI Calculation. Which answer should choose the most defensible file action?
A disciplinary-risk review raises a question about TILA APR and finance-charge rules. Which action should the renewal specialist recommend?
An MLO is reviewing procedures for a case where a compliance analyst asks why covered mortgage application data is collected. What is the proper handling?
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