TILA-RESPA Integrated Disclosure Rule (TRID)-Prep Xl Flashcards
Based on a valid change in circumstance, a creditor must re-issue a Loan Estimate:
A.Immediately upon learning of the change
B.Within three business days of learning of the change
C.Within one business day of learning of the change
D.Within five business days of learning of the change
The answer is:
within three business days of learning of the change. A revised Loan Estimate may be provided if changed circumstances cause a settlement charge to increase or, in the case of charges subject to the 10% tolerance rule, cause the total of all such charges to increase by more than the permitted 10%. In general, a revised Loan Estimate must be delivered or placed in the mail no later than three business days after receiving the information sufficient to allow the issuance of a revised Loan Estimate and no less than four business days before consummation
If the Closing Disclosure is mailed, when is it deemed received by the borrower?
A.Six business days after mailing
B.Seven business days after mailing
C.Three business days after mailing
D.Only upon actual receipt by the borrower
The answer is three business days after mailing. A Closing Disclosure is deemed received by the loan applicant three business days after it has been placed in the mail or sent for delivery. It may also be completed and delivered electronically if done in compliance with the Electronic Signatures in Global and National Commerce Act (E-Sign Act).
A borrower is refinancing the loan on the home in which he lives. The borrower’s father was a co-signer on the loan but has never lived in the home. Who must receive the proper rescission notice?
A.Either the occupying borrower or the father
B.Occupying borrower and father
C.Father only
D.Borrower only
The answer is occupying borrower and father. Any consumer who has an interest in the property, even if he or she did not sign the note, may exercise the right of rescission. Therefore, each person must be given two copies of a notice of the right to rescind. A rescission by one consumer constitutes a rescission by all.
A borrower submits all six pieces of information to a lender which constitute a loan application. However, the borrower refuses to tell the lender which loan program he prefers. Which of the following is true regarding the lender’s obligation to issue a Loan Estimate?
A.The lender is not required to issue the Loan Estimate
B.The lender is required to issue the Loan Estimate without disclosing a loan program
C.The lender is not allowed to issue a Loan Estimate
D.The lender is required to issue a Loan Estimate and may guess regarding the loan program
The answer is the lender is required to issue a Loan Estimate and may guess regarding the loan program. Upon receipt of a completed loan application, a lender must, within three business days of receipt, issue a Loan Estimate to the applicant. The Loan Estimate must provide a good faith estimate of the costs of the credit and the terms of the transaction based on the best information available at the time the disclosure is made.
Which line of the Loan Estimate would reflect any lender credits?
A.Funds for Borrower
B.Closing Costs Financed
C.Adjustments and Other Credits
D.Total Closing Costs
The answer is Total Closing Costs. The Total Closing Costs section totals the Loan Costs and Other Costs tables, plus the amount of any lender credits, on the Loan Estimate.
Assuming that a borrower is not allowed to shop for the appraisal, which of the following best describes the applicable tolerance?
A.No tolerance requirement
B.Zero tolerance
C.Tolerance depends on certain factors
D.10% tolerance
The answer is zero tolerance. If a loan applicant is not allowed to shop for an unaffiliated third-party service provider (e.g., an appraiser), the actual charge for such services may not exceed the amount quoted in the Loan Estimate; in other words, there is zero tolerance. Unless there is a change in circumstance, allowing for a re-issuance of the Loan Estimate, other fees in this category include transfer taxes, the mortgage licensee’s origination charge, and if the interest rate is locked, the credit or charge for the interest rate chosen or the adjusted origination charge.
A lender mails the Loan Estimate on Monday. Assuming no holidays and the lender is open on Saturdays, what is the earliest day on which the transaction may be consummated?
A.Tuesday of the following week
B.The following Monday
C.Wednesday of the following week
D.The following Thursday
The answer is Tuesday of the following week.
A Loan Estimate must be provided to the loan applicant no more than three business days after receipt of an application and
no less than seven business days prior to loan consummation.
A business day is defined for Loan Estimate purposes as all calendar days except Sundays and legal public holidays.
Using this information, the transaction could not be consummated earlier than Tuesday of the following week.
Monday its sent
Tuesday (day 1)
Wednesday (day 2)
Thursday (Day 3)
Friday (Day 4)
Saturday (Day 5)
Sunday (closed)
Monday (Day 6)
Tuesday (Day 7) “no less than seven business days prior to loan consummation. “
Which of the following transactions would not require the use of a Closing Disclosure?
A.Settlement involving a refinance of a loan on a primary residence
B.Settlement involving a loan being used to purchase a fourplex which is to be used strictly as an investment property
C.Settlement involving a cash purchase of a home to be used as a primary residence
D.Settlement involving a loan being used to purchase a condominium to be used as an investment property
The answer is settlement involving a cash purchase of a home to be used as a primary residence. A Closing Disclosure sets forth the final terms and conditions of a residential mortgage loan. If no loan is required in the purchase of residential real property, the Closing Disclosure is not necessary.
A borrower is refinancing an investment property. The borrower originally purchased the home as a primary residence, but the property is now used as an investment property. The borrower’s business partner is also a signer on the loan and a title holder. Who must receive the property rescission notice?
A.Tenant only
B.Both borrowers
C.The tenant and primary borrower
D.No rescission notice is required
The answer is no rescission notice is required. The right of rescission only applies to a mortgage loan secured by the borrower’s primary residence. Since the right of rescission does not apply to the refinance of an investment property, a rescission notice would not be required.
The final APR for a loan is disclosed on the:
A.Final Loan Estimate
B.Final Appraisal Notice
C.Note
D.Closing Disclosure
The answer is Closing Disclosure. The final annual percentage rate on a loan is set forth in the Closing Disclosure.
Within how many days of receipt of a loan application, as defined under federal rule, must a lender issue a Loan Estimate?
A.Three banking days
B.Three disclosure days
C.Three calendar days
D.Three business days
The answer is three business days. Pursuant to Regulation Z, the Loan Estimate must be provided to a loan applicant within three business days of a lender’s receipt of a completed loan application and no less than seven business days prior to loan consummation.
Assume an application is taken on Monday. Assuming no federal holidays, by which day must the Loan Estimate be issued?
A.Tuesday
B.Wednesday
C.Thursday
D.Friday
The answer is Thursday. Pursuant to Regulation Z, the Loan Estimate must be provided to a loan applicant within three business days of a lender’s receipt of a completed loan application and no less than seven business days prior to loan consummation. If a completed application is received on Monday, the Loan Estimate must be provided no later than the Thursday of that same week.
