A branch manager asks about a loan file because a late closing change occurs and the team must decide whether a new waiting period is required. What should happen?
Correct Answer
C) Restart the wait only for APR, product, or prepayment penalty changes
Why this is correct: The legal requirement is precise. Under the TRID rules (the governing federal rule, a creditor must deliver a corrected Closing Disclosure and wait an additional three business days before consummation only if a change is made to the Annual Percentage Rate (APR), the loan product, or if a prepayment penalty is added. The correct action is therefore to "Restart the wait only for APR, product, or prepayment penalty changes." Why the other choices are wrong: "Increase a zero-tolerance charge because the borrower accepted the cost verbally" is wrong because fees in the zero-tolerance category (like the credit charge) cannot increase from the Loan Estimate for any reason; borrower consent does not override this rule. "Assume the Corrected Closing Disclosure new waiting period condition is met because the borrower satisfied the separate flood insurance requirement" is wrong because fulfilling a separate condition like flood insurance is unrelated to the specific triggers for a new Closing Disclosure wait. "Use the lowest advertised provider quote after a different provider has been selected" is wrong because the Closing Disclosure must reflect the actual cost from the provider the borrower is using, not a potentially lower advertised rate from a different company. Exam tip: Don't confuse other loan conditions (like insurance) with the three specific triggers for a new Closing Disclosure wait. They are separate requirements.
Why This Is the Correct Answer
The correct response is "Restart the wait only for APR, product, or prepayment penalty changes" because Lines 205-206; 12 CFR 1026.19(f)(2)(ii).
Why the Other Options Are Wrong
Option A: Increase a zero-tolerance charge because the borrower accepted the cost verbally.
This choice is a tempting shortcut, but it conflicts with fee disclosure and tolerance treatment because the file still needs the required documentation, timing, or rule-based review before the action is taken.
Option B: Assume the Corrected Closing Disclosure new waiting period condition is met because the borrower satisfied the separate flood insurance requirement.
This distractor shifts the issue to a different trigger, product, or timing rule instead of applying the rule tested in the stem.
Option D: Use the lowest advertised provider quote after a different provider has been selected.
This choice is not the best answer because it applies the wrong file step for fee disclosure and tolerance treatment; the governing rule is tested by the correct option.
Memory Technique
Corrected Closing Disclosure new waiting period: identify the rule being tested, then choose the action that documents or applies that rule before the file moves forward.
Exam Tip
For fee disclosure and tolerance treatment questions, separate the required file step from plausible sales, timing, or documentation shortcuts.
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 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