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

The TRID rule, effective October 2015, mandates lenders deliver the Closing Disclosure a minimum of three business days before closing.

Question 2

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

Accepted Answer

Closing Disclosure (CD)

Answer

The Closing Disclosure replaced the HUD-1 Settlement Statement under TRID for most closed-end consumer mortgage transactions.

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

Title companies perform title searches, issue title insurance, and manage the escrow and disbursement of funds at closing.

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

Per diem (daily) interest covers the interest that accrues between the loan closing date and the first day of the following month.

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

Under TILA, borrowers have a three-business-day right of rescission on refinance transactions secured by their primary residence.

(CMA) Certified Mortgage Advisor Practice Test

(CMA) Certified Mortgage Advisor Practice Test

CMA Closing and Settlement Procedures