Mortgage Loan Originator (MLO) Licensing Practice Test

Lenders are required to provide Closing Disclosures to borrowers as part of the mortgage process. The Closing Disclosure is a critical document that outlines the final terms of a mortgage loan, including the monthly payment, interest rate, total closing costs, and other loan details. By law, lenders must ensure that borrowers receive this disclosure at least three business days before closing, allowing them the opportunity to review and understand the terms of the loan.

Providing the Closing Disclosure is essential for borrower transparency and helps prevent surprises at the closing table. This requirement is mandated under the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA), aimed at safeguarding consumers and promoting informed decision-making.

In contrast, the other options are not aligned with the regulatory requirements surrounding the Closing Disclosure. While creditors should receive a version of the document for compliance and record-keeping, the primary focus is the borrower's right to access this crucial information. The assertion that these disclosures are optional or can only be delivered via email does not align with the established legal requirements either, as they must be delivered in a manner that ensures the borrower receives them in a timely fashion.