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Question 1 of 6

1. Question
A lender is audited four years after a mortgage loan closed. During the examination, regulators request copies of the Loan Estimate, Closing Disclosure, and Escrow Closing Notice.

Which statement correctly describes the applicable federal record retention requirements?
- A) The Loan Estimate and Closing Disclosure must both be retained for five years
- B) The Escrow Closing Notice must be retained permanently
- C) The Loan Estimate must be retained for three years, the Closing Disclosure for five years, and certain post-consummation escrow disclosures for two years
- D) All mortgage disclosures must be retained for only two years after consummation
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Question 2 of 6

2. Question
A borrower submits a completed mortgage application on Monday. The lender waits until Friday of the following week to mail the Loan Estimate.

Why could this violate federal disclosure timing rules?
- A) The Loan Estimate must be delivered or mailed no later than three business days after receiving the application
- B) Loan Estimates may be delivered at any time before closing
- C) Timing rules apply only to FHA-insured loans
- D) Loan Estimates are required only for refinance transactions
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Question 3 of 6

3. Question
A lender issues a Loan Estimate to a borrower and then increases the quoted fees three business days later without a valid changed circumstance.

Why could this violate federal disclosure rules?
- A) Fees disclosed on the Loan Estimate must generally be honored for ten business days
- B) Fee quotes may be changed daily at the lender’s discretion
- C) Loan Estimate fees apply only until initial underwriting begins
- D) Fee tolerances apply only to government-insured loans
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Question 4 of 6

4. Question
Before providing the Loan Estimate, a lender charges the borrower application fees, underwriting fees, and processing fees.

Why could this violate federal disclosure requirements?
- A) Creditors may collect all customary fees before delivering the Loan Estimate
- B) The only fee that may be collected before preparation of the Loan Estimate is for a credit report
- C) Processing fees are exempt from disclosure requirements
- D) Upfront fees are prohibited only for FHA loans
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Question 5 of 6

5. Question
A creditor determines within three business days after receiving a loan application that the borrower cannot qualify for the loan terms requested.

Under federal disclosure rules, what may the creditor do regarding the Loan Estimate?
- A) The creditor must still issue the Loan Estimate within three business days
- B) The creditor may delay the Loan Estimate until after underwriting approval
- C) The creditor is not required to provide the Loan Estimate if the application cannot be approved on the requested terms within the three-business-day period
- D) The creditor may substitute a Closing Disclosure for the Loan Estimate
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Question 6 of 6

6. Question
A borrower withdraws a mortgage application two business days after submission and before the lender issues a Loan Estimate.

How do federal disclosure rules generally apply?
- A) The lender must still issue the Loan Estimate within three business days
- B) The lender may substitute a Closing Disclosure instead
- C) Loan Estimate requirements apply only after underwriting approval
- D) The creditor does not have to provide the Loan Estimate if the consumer withdraws the application within three business days
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