CMA Closing and Settlement Procedures

Question 1

What federal law requires lenders to provide borrowers with a Closing Disclosure at least three business days before loan consummation?

Accepted Answer

TILA-RESPA Integrated Disclosure (TRID) rule

Answer

Equal Credit Opportunity Act (ECOA)

Answer

Fair Housing Act

Answer

Homeowners Protection Act

Question 2

Which document at closing replaces the old HUD-1 Settlement Statement for most mortgage transactions?

Accepted Answer

Closing Disclosure (CD)

Answer

Truth-in-Lending Disclosure

Answer

Loan Estimate

Answer

Notice of Right to Cancel

Question 3

What is the primary role of a title company during a mortgage closing?

Accepted Answer

Ensure clear title transfer and disburse closing funds

Answer

Approve the borrower's creditworthiness

Answer

Conduct the appraisal of the property

Answer

Set the final interest rate

Question 4

Which closing cost item represents prepaid interest from the closing date to the end of the month?

Accepted Answer

Per diem interest

Answer

Origination fee

Answer

Escrow reserve

Answer

Recording fee

Question 5

When a borrower has the right of rescission under TILA, how many business days do they have to cancel a refinance transaction on their primary residence?

Accepted Answer

3 business days

Answer

1 business day

Answer

5 business days

Answer

7 business days

Question 6

What does a title insurance lender's policy protect?

Accepted Answer

The lender's interest against title defects up to the loan amount

Answer

The borrower against title defects discovered after closing

Answer

The real estate agent against commission disputes

Answer

The appraiser against valuation errors