Sec 1-Page 106

1. Question

A lender issues a revised Loan Estimate after unexpected settlement costs increase beyond the permitted tolerance limits following the original disclosure.

Under federal rules, how must the revised Loan Estimate be handled?

A) The revised Loan Estimate may include any increase desired by the creditor
B) The revised Loan Estimate may reflect increased charges only to the extent justified by the changed circumstance
C) Revised Loan Estimates are prohibited after the original disclosure is issued
D) Settlement charge increases are permitted only after consummation

2. Question

A hurricane damages a property during underwriting and creates additional closing costs before consummation.

How is this event generally treated under TILA-RESPA rules?

A) It is considered a changed circumstance because it is an extraordinary event beyond the control of interested parties
B) Natural disasters are excluded from changed circumstance rules
C) Revised Loan Estimates may never be issued after a disaster
D) Property damage affects only appraisal requirements

3. Question

A creditor relies on information provided by the borrower when issuing the original Loan Estimate. Later, the creditor discovers the information was inaccurate and revised settlement charges are necessary.

How do federal disclosure rules generally apply?

A) Creditors may never revise disclosures after application
B) Inaccurate information relied upon when providing the Loan Estimate may qualify as a changed circumstance
C) Revised disclosures are permitted only after closing
D) Borrowers are prohibited from correcting application information after submission

4. Question

After issuing the Loan Estimate, a creditor discovers new information regarding a property boundary dispute that was not known or relied upon when the original disclosure was prepared.

How is this situation generally treated under federal disclosure requirements?

A) New information discovered after the Loan Estimate may qualify as a changed circumstance
B) Property disputes affect only title insurance underwriting
C) Revised Loan Estimates are prohibited once underwriting begins
D) Boundary disputes require immediate loan denial

5. Question

A settlement charge subject to the 10% cumulative tolerance category increases beyond the permitted tolerance threshold because of a valid changed circumstance.

What may the creditor generally do?

A) The creditor must absorb all additional costs regardless of circumstance
B) The creditor may issue a revised Loan Estimate reflecting the increased charge
C) Revised Loan Estimates are permitted only for zero-tolerance fees
D) The creditor may increase charges only after consummation

6. Question

A title insurance company listed on the Loan Estimate goes out of business during underwriting, resulting in higher replacement settlement costs.

Why may a revised Loan Estimate be permitted?

A) Title insurance charges are exempt from all tolerance requirements
B) Creditors may revise disclosures whenever provider prices change
C) The failure of the title insurer may qualify as a changed circumstance affecting settlement costs
D) Revised Loan Estimates are prohibited after underwriting begins

7. Question

A neighbor files a legal claim contesting the property boundary after the original Loan Estimate is issued, creating additional title and settlement costs.

How is this event generally treated under TILA-RESPA rules?

A) Boundary disputes are unrelated to settlement costs
B) Such disputes automatically void the mortgage transaction
C) Revised disclosures are required only after consummation
D) Newly discovered information affecting the transaction may qualify as a changed circumstance

8. Question

A creditor intentionally delays collecting one of the six required application items until after issuing the Loan Estimate and later attempts to classify the information as a changed circumstance.

Why could this violate federal disclosure rules?

A) Creditors may delay collecting application information to create revised disclosure opportunities
B) The six application items are optional under TILA-RESPA rules
C) Creditors are presumed to have collected the required application information before issuing the Loan Estimate and may not later collect them and claim a changed circumstance
D) Changed circumstances apply only to appraisal-related fees

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