Chapter 22 — Self-Check Quiz

Twenty-five questions in the style of the SAFE MLO test. For every counting question, do the count on paper before you look at the options — the distractors are built from the counts people actually produce. The answer key is at the bottom in a collapsed block.

Assume, unless a question says otherwise, that the creditor's offices are open Monday through Friday and closed Saturday and Sunday, and that no federal holiday falls in the period being counted.

1. The TILA-RESPA Integrated Disclosure rule replaced which four forms?

(a) The Good Faith Estimate, the HUD-1, the 1003, and the appraisal (b) The Good Faith Estimate, the initial Truth in Lending disclosure, the HUD-1 Settlement Statement, and the final Truth in Lending disclosure (c) The Loan Estimate, the Closing Disclosure, the HUD-1, and the note (d) The Good Faith Estimate, the HUD-1A, the servicing disclosure, and the affiliated business disclosure

2. Under Regulation Z's general definition, a business day is:

(a) any calendar day except Sunday (b) Monday through Friday, always (c) a day on which the creditor's offices are open to the public for carrying on substantially all of its business functions (d) any day on which the Federal Reserve is open

3. Under Regulation Z's precise definition, a business day is:

(a) all calendar days except Saturdays, Sundays, and federal legal holidays (b) all calendar days except Sundays and the federal legal public holidays specified by statute (c) all calendar days except Sundays (d) any day the settlement agent's office is open

4. Which of these timing rules is governed by the general definition?

(a) The seven-business-day waiting period after Loan Estimate delivery (b) The three-business-day period between receipt of the Closing Disclosure and consummation (c) Delivering or mailing the Loan Estimate within three business days of a completed application (d) The right of rescission

5. A creditor whose offices are open Monday through Friday receives a complete application on Wednesday. The Loan Estimate must be delivered or placed in the mail no later than:

(a) Friday · (b) Saturday · (c) Monday · (d) Tuesday

6. A consumer receives the Closing Disclosure by hand on Tuesday. The earliest date consummation may occur is:

(a) Thursday · (b) Friday · (c) Saturday · (d) Monday

7. A consumer receives the Closing Disclosure by hand on Thursday. The earliest date consummation may occur is:

(a) Saturday · (b) Sunday · (c) Monday · (d) Tuesday

8. The reason the answers to questions 6 and 7 are three and four calendar days out respectively is that:

(a) the creditor's offices are closed on weekends (b) Saturday counts as a business day under the precise definition and Sunday does not (c) Saturday and Sunday both count under the precise definition (d) the rule always adds a full week when a weekend intervenes

9. A creditor places the Closing Disclosure in the mail on Tuesday and has no evidence of actual receipt. The earliest date consummation may occur is:

(a) Friday of the same week (b) Monday of the following week (c) Tuesday of the following week (d) Wednesday of the following week

10. A Closing Disclosure is hand-delivered on the Tuesday before Thanksgiving. The earliest date consummation may occur is:

(a) Friday of that week · (b) Saturday of that week · (c) Monday of the following week · (d) Wednesday of the following week

11. A Loan Estimate is hand-delivered on Thursday. Under the seven-business-day waiting period, the earliest date consummation may occur is:

(a) the following Wednesday · (b) the following Thursday · (c) the following Friday · (d) the following Saturday

12. Which charge carries a zero tolerance?

(a) the initial escrow deposit (b) a transfer tax (c) the first-year homeowners insurance premium (d) a survey fee where the borrower selected the provider independently

13. Which charge falls in the ten percent cumulative bucket?

(a) prepaid interest (b) the appraisal fee (c) recording fees (d) owner's title insurance the borrower elected to purchase

14. A borrower shops for a settlement agent and selects one not on the creditor's written list of service providers. That charge is subject to:

(a) zero tolerance · (b) ten percent cumulative tolerance · (c) unlimited tolerance · (d) whichever tolerance the creditor designates

15. On a Loan Estimate, the ten-percent-bucket charges total \$2,400. At closing they total \$2,700. The creditor owes the borrower:

(a) \$0 · (b) \$60 · (c) \$240 · (d) \$300

16. A \$1,250 underwriting fee is disclosed on the Loan Estimate and appears at closing as \$1,450, with no documented changed circumstance. The creditor owes:

(a) \$0, because the increase is under 20% (b) \$75, the amount above ten percent (c) \$200, the entire increase (d) \$1,450, the entire fee

17. A tolerance violation must be cured by refunding the excess and delivering a corrected Closing Disclosure no later than:

(a) 30 calendar days after consummation (b) 60 calendar days after consummation (c) 3 business days after consummation (d) the end of the calendar year

18. Which of the following is not a permitted reason to issue a revised Loan Estimate?

(a) the consumer requests a longer lock, which costs money (b) an appraisal reveals a condition requiring an additional inspection (c) the rate was floating and has now been locked (d) the file took longer than expected and the existing lock expired

19. A revised Loan Estimate issued because the rate was locked resets the tolerance baseline for:

(a) every charge on the form (b) only the charges the rate lock actually affected (c) only Section B charges (d) nothing; a revised Loan Estimate never resets a baseline

20. After a Closing Disclosure has been delivered, which change requires a new three-business-day waiting period?

(a) the cash to close increases by \$3,100 (b) the seller increases their closing-cost credit (c) the loan product changes from a 30-year fixed to a 5/6 ARM (d) a recording fee increases by 25%

21. For a regular transaction, a disclosed annual percentage rate is generally considered accurate if it is within:

(a) 1/8 of one percentage point above the actual APR only (b) 1/8 of one percentage point above or below the actual APR (c) 1/4 of one percentage point above or below the actual APR (d) one full percentage point either way

22. The Total Interest Percentage on the Closing Disclosure expresses:

(a) the annual percentage rate as a decimal (b) total scheduled interest as a percentage of the loan amount (c) total finance charge as a percentage of the amount financed (d) the share of the first payment that is interest

23. A creditor must retain the Closing Disclosure and documents related to it for:

(a) 25 months · (b) 2 years · (c) 3 years · (d) 5 years

24. A consumer's signature on the Confirm Receipt line of a Closing Disclosure establishes:

(a) that the consumer agrees to the loan terms (b) that the consumer received the disclosure (c) that the consumer waived the waiting period (d) that the consumer indicated intent to proceed

25. A consumer may shorten or waive the three-business-day waiting period only:

(a) by asking the loan officer in writing at any time for any reason (b) by signing a preprinted waiver form supplied by the creditor (c) for a bona fide personal financial emergency, using a dated written statement describing the emergency, signed by all consumers primarily liable (d) never, under any circumstances

Short answer

26. In one sentence each, state which definition of business day governs (a) Loan Estimate delivery, (b) the seven-business-day waiting period, and (c) the three-business-day Closing Disclosure rule — and name the single day of the week where the two definitions most often disagree.

27. On the Linden Street file the Closing Disclosure was received Tuesday, day 48, and closing was Friday, day 51. Write the count out, day by day, and say why the day of receipt is not counted.

28. Explain in two sentences why the \$914.38 lock extension purchased on day 42 could not be charged to the borrower, and name the date that decides it.

29. A borrower says: "My Closing Disclosure shows a TIP of 130.512%. Am I paying 130% interest?" Answer them in under forty words.

30. Give the one question you ask, before any other, when someone hands you a business-day counting problem.

Answer key **1. (b)** The Good Faith Estimate and the initial Truth in Lending disclosure at the front; the HUD-1 Settlement Statement and the final Truth in Lending disclosure at the back. Two statutes, two regulations, four forms. **2. (c)** It is a fact about the creditor's operations, not about the calendar. **3. (b)** All calendar days except Sundays and the federal legal public holidays specified in 5 U.S.C. 6103(a). **Saturday counts.** **4. (c)** Loan Estimate delivery is the rule on this list that runs on the general definition. The other three run on the precise definition. **5. (c) Monday.** Application Wednesday is day zero; Thursday 1, Friday 2, Saturday and Sunday excluded because the offices are closed, Monday 3. **6. (b) Friday.** Tuesday is day zero; Wednesday 1, Thursday 2, Friday 3. Consummation may occur on the third business day. This is the Linden Street count exactly. **7. (c) Monday.** Thursday is day zero; Friday 1, **Saturday 2**, Sunday excluded, Monday 3. **8. (b)** Saturday is a business day under the precise definition; Sunday is not. That single asymmetry produces every "why is this answer a day later than I expected" moment in this subject. **9. (c) Tuesday of the following week.** Two counts stacked. Mailed Tuesday, presumed received three business days later: Wednesday 1, Thursday 2, Friday 3 — presumed received **Friday**. Then the waiting period from Friday: Saturday 1, Sunday excluded, Monday 2, Tuesday 3. A mailed Closing Disclosure consumes roughly six business days, not three. **10. (b) Saturday of that week.** Tuesday is day zero; Wednesday 1; **Thanksgiving Day is a federal legal public holiday and is excluded**; Friday 2; Saturday 3. The Friday after Thanksgiving is not a federal legal public holiday and does count. **11. (c) the following Friday.** Thursday is day zero; Friday 1, Saturday 2, Sunday excluded, Monday 3, Tuesday 4, Wednesday 5, Thursday 6, Friday 7. **12. (b)** Transfer taxes are a zero-tolerance item, along with the creditor's own charges and charges for services the borrower could not shop for. The other three are unlimited. **13. (c)** Recording fees, together with charges for shoppable services where the borrower selected a provider **on the creditor's written list**. **14. (c) Unlimited.** Choosing off the written list moves the charge out of the ten-percent bucket entirely. This is why the written list, and the record of what the borrower actually chose, matter. **15. (b) \$60.** Ceiling is \$2,400 + \$240 = \$2,640. Charged \$2,700. Excess over the ceiling is \$2,700 − \$2,640 = \$60. You refund the amount above the ceiling, not the whole increase. **16. (c) \$200.** An underwriting fee is a creditor charge, so it carries a **zero** tolerance and the entire increase is refunded. Option (b) is the trap: there is no ten percent in this bucket. **17. (b) 60 calendar days after consummation** — both the refund and the corrected Closing Disclosure. Verify the current rule with your compliance department. **18. (d)** A lock expiring because the file ran long is not an extraordinary event beyond anyone's control, not inaccurate information the creditor relied on, and not new information about the consumer. The creditor absorbs the cost. **19. (b)** A revised Loan Estimate resets the baseline only for the charges the reason for revision actually affected. Locking the rate resets Section A; it does not reset title, settlement, or recording fees. **20. (c)** Only three changes restart the clock: the APR becoming inaccurate, the loan product changing, and a prepayment penalty being added. Everything else is a corrected Closing Disclosure received at or before consummation. **21. (b)** Generally 1/8 of one percentage point **above or below** for a regular transaction; 1/4 of one percentage point for an irregular transaction. The "or below" is the part candidates miss. **22. (b)** Total scheduled interest as a percentage of the loan amount. It excludes mortgage insurance and closing costs, which is exactly why it differs from the APR. **23. (d) 5 years** after consummation for the Closing Disclosure and documents related to it; three years for other evidence of compliance with the Loan Estimate and Closing Disclosure requirements. **24. (b)** Receipt only. It is not agreement, not a waiver, and not an intent to proceed. **25. (c)** A bona fide personal financial emergency, documented by a dated written statement describing the emergency, specifically modifying or waiving the waiting period, signed by all consumers primarily liable. Preprinted forms are not permitted. A moving truck is not an emergency. **26.** (a) Loan Estimate delivery — **general**. (b) The seven-business-day waiting period — **precise**. (c) The three-business-day Closing Disclosure rule — **precise**. The day they most often disagree on is **Saturday**, which counts under the precise definition and usually does not under the general one. **27.** Tuesday day 48 is day zero — the day of receipt is not counted, because the rule gives the borrower three full business days *after* receiving the form to read it. Wednesday day 49 is business day 1, Thursday day 50 is business day 2, Friday day 51 is business day 3, and consummation may occur on the third business day. **28.** A lock-extension fee is a charge by the creditor, which puts it in the zero-tolerance bucket, and no valid changed circumstance existed to reset that baseline. The date that decides it is **day 42** — the extension was purchased two days before the credit refresh on day 44 revealed anything the borrowers had done, so the creditor cannot justify the charge with a fact it did not yet have. **29.** No. It means that over thirty years of scheduled payments you would pay about \$1.31 of interest for every \$1.00 you borrowed. It is not a rate you are charged; your rate is 6.625%. **30.** *Which rule am I counting?* Everything else — whether Saturday counts, whether the day of delivery counts, whether a holiday matters — follows from that one answer.