A closing coordinator compares the file facts with TILA Advertising Requirements during a borrower follow-up call. Which conclusion is accurate?
Correct Answer
C) Advertise only terms actually available
Why this is correct: TILA's advertising rules (Regulation Z) require that advertisements for closed-end credit be truthful and not misleading. A core principle is that advertised terms must be terms that are actually available to consumers. The correct answer, "Advertise only terms actually available," is the foundational rule for mortgage advertising compliance. Why the other choices are wrong: "Assume the TILA Advertising Requirements condition is met because the borrower satisfied the separate secondary-market delivery requirement" is wrong because advertising rules and secondary-market delivery are separate legal obligations; one does not satisfy the other. "Wait until a regulator asks for the file before applying the federal requirement" is wrong because compliance must be proactive, not reactive. "Rely on oral agreement when the rule requires documented compliance" is wrong because TILA advertising rules require disclosures to be in writing when trigger terms are used. Exam tip: If a mortgage ad uses a "trigger term" (like a payment amount or rate), it must also disclose the APR, loan amount, and other required terms—and all advertised terms must be genuinely available.
Why This Is the Correct Answer
The correct response is "Advertise only terms actually available" because Mortgage advertisements must be truthful and include required APR or trigger-term disclosures.
Why the Other Options Are Wrong
Option A: Assume the TILA Advertising Requirements condition is met because the borrower satisfied the separate secondary-market delivery requirement.
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
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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