In a mortgage origination file, the consumer locks the interest rate after the initial disclosure package. Which action should be taken?
Correct Answer
B) Send the revised Loan Estimate within three business days
Why this is correct: Under TRID rules (the governing federal rule, when a consumer locks an interest rate after receiving the initial Loan Estimate and this lock changes previously disclosed terms, a revised Loan Estimate must be provided within three business days. The original explanation confirms this requirement. Thus, "Send the revised Loan Estimate within three business days" is the necessary step. Why the other choices are wrong: "Move the file to closing without resolving a known lock-expiration conflict" is incorrect because proceeding to closing with an unresolved lock expiration could lead to disclosure inaccuracies and potential violations. "Assume the borrower accepted lock changes because the payment is lower" is wrong because borrower acceptance of changes must be documented and informed, not assumed based on perceived benefit. "Change locked terms without documenting the lock agreement and borrower authorization" is prohibited as changes require proper documentation and consent. Exam tip: Any change in terms due to a rate lock triggers a revised Loan Estimate within 3 business days. Always check for changes.
Why This Is the Correct Answer
The correct response is "Send the revised Loan Estimate within three business days" because Lines 198-203; 12 CFR 1026.19(e)(3)(iv)(D).
Why the Other Options Are Wrong
Option A: Move the file to closing without resolving a known lock-expiration conflict.
This choice is a tempting shortcut, but it conflicts with rate-lock documentation because the file still needs the required documentation, timing, or rule-based review before the action is taken.
Option C: Assume the borrower accepted lock changes because the payment is lower.
This choice is not the best answer because it applies the wrong file step for rate-lock documentation; the governing rule is tested by the correct option.
Option D: Change locked terms without documenting the lock agreement and borrower authorization.
This choice is a tempting shortcut, but it conflicts with rate-lock documentation because the file still needs the required documentation, timing, or rule-based review before the action is taken.
Memory Technique
rate-lock agreements: identify the rule being tested, then choose the action that documents or applies that rule before the file moves forward.
Exam Tip
For rate-lock documentation 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
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