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Question 1 of 5

1. Question
A creditor issues a Loan Estimate based on the borrower’s stated annual income of $90,000. During underwriting, verified documentation shows the borrower’s actual income is only $80,000, making the borrower ineligible for the originally disclosed loan terms.

How may the creditor generally respond under TILA-RESPA rules?
- A) The creditor must honor the original loan terms regardless of underwriting results
- B) The creditor may issue a revised Loan Estimate if a changed circumstance affecting creditworthiness makes the borrower ineligible for previously disclosed loan terms
- C) Revised Loan Estimates are prohibited after underwriting begins
- D) Income verification changes affect only appraisal requirements
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Question 2 of 5

2. Question
Two co-borrowers apply for a mortgage loan using their combined income. After the Loan Estimate is issued, one borrower loses employment, affecting qualification for the disclosed loan terms.

How is this event generally treated under federal disclosure rules?
- A) Employment changes are unrelated to loan eligibility
- B) Revised Loan Estimates are prohibited after application submission
- C) A change in employment affecting combined income may qualify as a changed circumstance permitting revised disclosures
- D) Creditors must deny the application immediately without revised disclosures
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Question 3 of 5

3. Question
A borrower originally qualifies for a lower-cost loan program disclosed on the Loan Estimate. Later, a change affecting the borrower’s creditworthiness results in higher settlement service costs that exceed tolerance thresholds.

Why may a revised Loan Estimate be permitted?
- A) Creditors may revise Loan Estimates whenever settlement fees increase
- B) A changed circumstance affecting eligibility for disclosed loan terms may justify revised disclosures and increased settlement costs
- C) Revised disclosures are allowed only for appraisal-related changes
- D) Settlement costs may never exceed original estimates
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Question 4 of 5

4. Question
After receiving the Loan Estimate, a borrower requests changes to the loan terms that increase settlement charges.

How may the creditor generally respond under TILA-RESPA rules?
- A) The creditor may issue a revised Loan Estimate reflecting the increased charges caused by the consumer’s requested revisions
- B) Loan terms may not be changed after disclosure issuance
- C) Consumer-requested revisions affect only underwriting conditions
- D) Revised Loan Estimates are prohibited if settlement charges increase
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Question 5 of 5

5. Question
A lender issues a revised Loan Estimate after a valid changed circumstance increases disclosed settlement charges.

Why is the revised disclosure important under TILA-RESPA rules?
- A) Revised Loan Estimates eliminate all tolerance limitations
- B) Revised disclosures are used only for recordkeeping purposes
- C) Providing a revised Loan Estimate allows creditors to compare updated charges caused by permitted re-disclosure events to the actual amounts charged
- D) Revised Loan Estimates are required only for FHA-insured loans
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