Loan Officer Practice Exam

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Study for the Loan Officer Exam. Enhance your skills with flashcards and multiple choice questions, each question includes hints and explanations. Get exam-ready today!

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How many calendar days after closing must a lender refund excess amounts paid by a borrower that exceed the disclosed amounts on the Loan Estimate?

The correct answer is: 60

In the context of loan transactions, lenders are required to ensure that borrowers are refunded any excess amounts they have paid if those amounts exceed what was initially disclosed on the Loan Estimate. According to the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA), lenders must issue this refund within a specific timeframe. The correct answer is 60 calendar days after closing. This requirement is in place to protect consumers and ensure transparency in lending practices. By providing a two-month window for the refund process, the law allows lenders adequate time to review, calculate, and disburse the necessary funds to borrowers who have been overcharged. Timely refunds are crucial as they help maintain borrower trust and compliance with federal regulations related to mortgage lending. Thus, understanding this timeline is essential for loan officers and lenders to adhere to legal obligations and ensure fair lending practices.