RESIDENTIAL LENDING COMPLIANCE
CERTIFICATION EXAMINATION COMPLETE
QUESTIONS AND DETAILED SOLUTIONS LATEST
UPDATE THIS YEAR JUST RELEASED
1.
A mortgage creditor receives an application containing the consumer's name,
income, Social Security number, property address, estimated property value, and
requested loan amount. What compliance obligation is generally triggered under
TRID?
A. Immediate Closing Disclosure
B. Loan Estimate within three business days
C. Appraisal within three business days
D. Adverse-action notice within ten days
Answer: B
Rationale: For a covered transaction, those six pieces of information constitute an
application under TRID, generally triggering delivery or mailing of the Loan
Estimate within three business days. (
2.
What is the primary purpose of the Loan Estimate in a covered residential
mortgage transaction?
,A. To finalize the borrower's settlement obligations
B. To provide early information about loan terms and estimated costs
C. To replace the promissory note
D. To establish the property's final appraised value
Answer: B
Rationale: The Loan Estimate gives consumers early standardized information
about important mortgage terms, projected payments, and estimated closing
costs. (
3.
How many business days before scheduled closing must a borrower generally
receive the Closing Disclosure?
A. One
B. Two
C. Three
D. Five
Answer: C
Rationale: TRID generally requires the creditor to ensure that the consumer
receives the Closing Disclosure at least three business days before consummation.
()
4.
,Which federal regulation implements the Equal Credit Opportunity Act for
residential lending?
A. Regulation X
B. Regulation B
C. Regulation C
D. Regulation V
Answer: B
Rationale: Regulation B, located in 12 CFR Part 1002, implements ECOA and
addresses discrimination, adverse action, application evaluation, appraisals, and
related requirements. (
5.
A loan officer tells an applicant, “You probably should not apply because people in
your situation rarely qualify.” What compliance concern does this create?
A. HMDA reporting error
B. Discouragement under Regulation B
C. RESPA escrow violation
D. TILA advertising violation
Answer: B
Rationale: Regulation B addresses creditor conduct that discourages prospective
applicants from making applications based on prohibited discriminatory
considerations. ()
, 6.
Which action best demonstrates compliant adverse-action processing?
A. Providing no explanation to the applicant
B. Giving only the employee's personal opinion
C. Providing the required notice and applicable specific reasons
D. Telling the applicant to contact the appraiser
Answer: C
Rationale: Regulation B establishes notification requirements when adverse
action is taken, including applicable requirements concerning specific reasons for
credit denial. (
7.
A creditor receives a complete first-lien dwelling-secured credit application.
Which valuation-related requirement generally applies?
A. The consumer must pay separately for every copy
B. Copies of covered appraisals and written valuations must generally be provided
C. The creditor may permanently withhold valuations
D. Only the seller receives valuation documents
Answer: B
Rationale: Regulation B requires creditors to provide applicants with free copies
of covered appraisals and other written valuations developed for qualifying first-
lien dwelling-secured applications. ()
CERTIFICATION EXAMINATION COMPLETE
QUESTIONS AND DETAILED SOLUTIONS LATEST
UPDATE THIS YEAR JUST RELEASED
1.
A mortgage creditor receives an application containing the consumer's name,
income, Social Security number, property address, estimated property value, and
requested loan amount. What compliance obligation is generally triggered under
TRID?
A. Immediate Closing Disclosure
B. Loan Estimate within three business days
C. Appraisal within three business days
D. Adverse-action notice within ten days
Answer: B
Rationale: For a covered transaction, those six pieces of information constitute an
application under TRID, generally triggering delivery or mailing of the Loan
Estimate within three business days. (
2.
What is the primary purpose of the Loan Estimate in a covered residential
mortgage transaction?
,A. To finalize the borrower's settlement obligations
B. To provide early information about loan terms and estimated costs
C. To replace the promissory note
D. To establish the property's final appraised value
Answer: B
Rationale: The Loan Estimate gives consumers early standardized information
about important mortgage terms, projected payments, and estimated closing
costs. (
3.
How many business days before scheduled closing must a borrower generally
receive the Closing Disclosure?
A. One
B. Two
C. Three
D. Five
Answer: C
Rationale: TRID generally requires the creditor to ensure that the consumer
receives the Closing Disclosure at least three business days before consummation.
()
4.
,Which federal regulation implements the Equal Credit Opportunity Act for
residential lending?
A. Regulation X
B. Regulation B
C. Regulation C
D. Regulation V
Answer: B
Rationale: Regulation B, located in 12 CFR Part 1002, implements ECOA and
addresses discrimination, adverse action, application evaluation, appraisals, and
related requirements. (
5.
A loan officer tells an applicant, “You probably should not apply because people in
your situation rarely qualify.” What compliance concern does this create?
A. HMDA reporting error
B. Discouragement under Regulation B
C. RESPA escrow violation
D. TILA advertising violation
Answer: B
Rationale: Regulation B addresses creditor conduct that discourages prospective
applicants from making applications based on prohibited discriminatory
considerations. ()
, 6.
Which action best demonstrates compliant adverse-action processing?
A. Providing no explanation to the applicant
B. Giving only the employee's personal opinion
C. Providing the required notice and applicable specific reasons
D. Telling the applicant to contact the appraiser
Answer: C
Rationale: Regulation B establishes notification requirements when adverse
action is taken, including applicable requirements concerning specific reasons for
credit denial. (
7.
A creditor receives a complete first-lien dwelling-secured credit application.
Which valuation-related requirement generally applies?
A. The consumer must pay separately for every copy
B. Copies of covered appraisals and written valuations must generally be provided
C. The creditor may permanently withhold valuations
D. Only the seller receives valuation documents
Answer: B
Rationale: Regulation B requires creditors to provide applicants with free copies
of covered appraisals and other written valuations developed for qualifying first-
lien dwelling-secured applications. ()
