A borrower writes asking for a breakdown of the escrow disbursements over the last two years. The request is routed to a shared inbox and sits unread for a week. What has the servicer already failed to do?
Correct Answer
C) Acknowledge receipt within five business days
Why this is correct: The governing concept is Regulation X (the governing federal rule, which implements the Real Estate Settlement Procedures Act (RESPA). For a valid written request for information sent to a servicer's designated address, the servicer has a specific duty to acknowledge receipt of that request. The rule mandates this acknowledgment be sent to the borrower within five business days of receipt. The facts describe a borrower sending a written request to the servicer-designated address, triggering this precise duty. Therefore, the correct action is to acknowledge receipt within five business days. Why the other choices are wrong: The choice "Resolve the Regulation X request for information timing issue with the high-cost loan exception that does not fit the facts" is wrong because it incorrectly applies an exception. The high-cost loan rules (like HOEPA) are separate from the general Regulation X request for information procedures; using an unrelated exception to resolve a timing issue is not compliant. The choice "Wait until a regulator asks for the file before applying the federal requirement" is wrong because it advocates for non-compliance. The duty to acknowledge is triggered by the borrower's request, not by regulatory inquiry; waiting violates the mandatory five-day timeline. The choice "Rely on oral agreement when the rule requires documented compliance" is wrong because Regulation X requirements for acknowledging information requests are formal and require written or electronic documentation; an oral agreement does not satisfy the legal obligation for a documented acknowledgment. Exam tip: For Regulation X information requests, remember the "5/30/7" framework: Acknowledge within 5 business days, respond substantively within 30 business days (plus a possible 15-day extension), and correct errors within 7 business days. The five-day acknowledgment is a mandatory first step.
Why This Is the Correct Answer
The correct response is "Acknowledge receipt within five business days" because Lines 33-41; 12 CFR 1024.36(c).
Why the Other Options Are Wrong
Option A: Resolve the Regulation X request for information timing issue with the high-cost loan exception that does not fit the facts.
This distractor shifts the issue to a different trigger, product, or timing rule instead of applying the rule tested in the stem.
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 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
RESPA and Regulation X: 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 RESPA and Regulation X; 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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