Where this fits on the exam
| Official syllabus topic | Federal Lending Laws: TILA, RESPA, ECOA, and TRID |
|---|---|
| Official PSI area | Financing |
| Published area weight | 10% of the national portion |
| Exam portion | National salesperson portion |
| Source edition | PSI Georgia Candidate Information Bulletin dated July 1, 2026 |
The Rule
PSI publishes the weight for the complete content area, not a fixed question count for this lesson. Learn the rule well enough to apply it when PSI changes names, numbers, or parties in a new scenario.
The lesson
TILA and Regulation Z
Covered creditors disclose the cost and terms of consumer credit, including finance charge and annual percentage rate, and follow rules for advertising, rescission where applicable, servicing, and mortgage practices.
RESPA and Regulation X
RESPA addresses real estate settlement services, disclosures, servicing, escrow, and affiliated arrangements. Section 8 prohibits giving or accepting a thing of value for referrals under an agreement or understanding involving covered settlement-service business.
ECOA and Regulation B
Creditors may not discriminate in a credit transaction on prohibited bases such as race, color, religion, national origin, sex, marital status, age when capable of contracting, public-assistance income, or good-faith exercise of consumer-credit rights.
TRID and disclosures
For covered transactions, consumers generally receive a Loan Estimate after application and a Closing Disclosure before consummation under timing and tolerance rules. Not every loan is covered.
TRID timing and counting
For a covered mortgage, deliver or mail the Loan Estimate within three business days after receiving the application; it generally must also be provided at least seven business days before consummation. The consumer must receive the Closing Disclosure at least three business days before consummation. Business-day definitions differ by requirement. A loan-product change, newly added prepayment penalty, or inaccurate APR can require a new Closing Disclosure waiting period; every cost correction does not.
Two business-day clocks
For the initial three-day Loan Estimate delivery-or-mailing deadline, count days when the creditor is open for substantially all business functions. For the seven-day Loan Estimate wait and the Closing Disclosure waiting period, count every calendar day except Sundays and the specified legal public holidays. Saturday can count even when the lender is closed. For a mailed Closing Disclosure, distinguish presumed receipt from the waiting period after receipt; reliable evidence of actual earlier receipt can change the dates.
Fee categories before percentages
Creditor, broker, affiliate, required non-shoppable service charges, and transfer taxes generally fall under the no-increase rule. Recording fees and qualifying shoppable services selected from the creditor's written list can fall within a 10% aggregate limit. Other permitted categories use different treatment. Identify the charge, provider, shopping choice, valid revision, and any exception before applying a percentage. Disclosure alone does not cure an excess charge.
Credit advertising and rescission
Regulation Z advertising trigger terms include a stated payment amount or repayment period and can require repayment terms and APR disclosures. Do not advertise only the attractive first payment. TILA rescission generally applies to certain nonpurchase loans secured by a principal dwelling, subject to exceptions. A purchase mortgage is not automatically cancelable for three days after closing.
Decision rule
Georgia-specific distinction
Worked example
Scenario. A settlement provider pays a real estate licensee $150 for every buyer referred, with no actual service performed.
Reason it through. The payment is tied to settlement-service referrals rather than compensable work, which is the core RESPA Section 8 concern.
Answer. The arrangement is prohibited when the transaction and services fall within RESPA.
Common exam traps
- Calling APR the note rate
- Assuming every referral payment is lawful marketing
- Applying ECOA only after denial
- Assuming TRID covers every loan
Original practice questions with detailed explanations
These questions were written for instruction and mapped to the current outline. They are not copied from PSI or any live examination. Choose an answer before opening the explanation.
Question 1For sales financed by federally related mortgage loans, a title company pays a Georgia licensee $200 for each buyer the licensee refers to it. The licensee performs no service for the payment. Which law does this arrangement most directly violate?
- A. Truth in Lending Act
- B. Equal Credit Opportunity Act
- C. Real Estate Settlement Procedures Act
- D. Fair Housing Act
Show answer and explanation →
Answer: C. Real Estate Settlement Procedures Act
RESPA Section 8 prohibits a payment for referring settlement-service business involving a federally related mortgage loan. The stated $200 is for the referral, not a bona fide service. TILA concerns credit-cost disclosures and does not answer this referral-payment issue.
- A. Incorrect. TILA governs credit-cost disclosures, not payment for steering settlement business.
- B. Incorrect. ECOA addresses discrimination in credit decisions; no discriminatory lending decision is described.
- C. Correct. In a transaction covered by RESPA, paying $200 solely for a settlement-service referral violates Section 8.
- D. Incorrect. The Fair Housing Act concerns housing discrimination; the stated issue is an unearned referral payment.
Question 2A lender denies a mortgage because the applicant is 67 years old, even though the applicant's income and credit meet the program's standards. Which federal law most directly prohibits this?
- A. Real Estate Settlement Procedures Act
- B. Truth in Lending Act
- C. Fair Housing Act
- D. Equal Credit Opportunity Act
Show answer and explanation →
Answer: D. Equal Credit Opportunity Act
ECOA and Regulation B bar credit discrimination based on age, as long as the applicant can legally contract, along with marital status and other listed grounds. The Fair Housing Act is wrong because age is not one of its protected classes.
- A. Incorrect. RESPA addresses settlement practices, not the applicant's age as a credit criterion.
- B. Incorrect. TILA requires credit disclosures; disclosure does not make age discrimination lawful.
- C. Incorrect. Age is not one of the Fair Housing Act's listed protected classes.
- D. Correct. ECOA prohibits this denial solely because of age when the applicant can contract and otherwise qualifies.
Question 3For a covered consumer mortgage, which disclosure does the borrower receive before consummation showing the final loan terms and closing costs?
- A. Loan Estimate
- B. Closing Disclosure
- C. Settlement cost booklet
- D. Good Faith Estimate
Show answer and explanation →
Answer: B. Closing Disclosure
Under TRID, the Loan Estimate comes after application and the Closing Disclosure gives the final terms and costs before consummation. The Loan Estimate is the wrong choice, but it shows estimated figures early in the process, not the final ones.
- A. Incorrect. The Loan Estimate presents estimated terms and costs earlier, after the application.
- B. Correct. For a TRID-covered loan, the Closing Disclosure states final terms and costs before consummation.
- C. Incorrect. The booklet explains shopping for settlement services; it is not the final transaction disclosure.
- D. Incorrect. A Good Faith Estimate is used for certain loans outside TRID; it is not the final disclosure for this covered mortgage.
Question 4A creditor receives a complete application for a TRID-covered mortgage. The appraisal will arrive next week. May the creditor wait for that appraisal before issuing the initial Loan Estimate?
- A. Yes, estimates require a final appraised value
- B. No, deliver or mail it within three business days of the application
- C. Yes, if closing is more than a month away
- D. No, the Loan Estimate must always be received the same day
Show answer and explanation →
Answer: B. No, deliver or mail it within three business days of the application
The initial Loan Estimate deadline follows the application, rather than completion of underwriting or appraisal.
- A. Incorrect. Initial disclosures use estimates; waiting for a final appraisal does not suspend the application deadline.
- B. Correct. The initial delivery-or-mailing deadline is three business days after application.
- C. Incorrect. A distant closing does not extend the initial deadline.
- D. Incorrect. The rule provides a three-business-day delivery-or-mailing period, not universal same-day receipt.
Question 5After the buyer receives a Closing Disclosure, the lender adds a prepayment penalty that was not previously disclosed. For this TRID-covered loan, what follows?
- A. A corrected disclosure and a new three-business-day wait before consummation
- B. Only a verbal warning at the signing table
- C. No new wait because the principal balance is unchanged
- D. A new wait for every closing-cost change, regardless of type
Show answer and explanation →
Answer: A. A corrected disclosure and a new three-business-day wait before consummation
Adding a prepayment penalty is one of the changes that requires a corrected Closing Disclosure and a new waiting period.
- A. Correct. A newly added prepayment penalty triggers the new disclosure waiting period.
- B. Incorrect. An oral warning cannot replace the corrected disclosure and required wait.
- C. Incorrect. The trigger is the new penalty, not whether the original loan amount changed.
- D. Incorrect. Some corrections do not restart the wait; the specific triggering change matters.
Question 6A mortgage credit advertisement states '$1,200 per month for 30 years' but leaves out the required APR and complete repayment disclosures. Which issue is most direct?
- A. RESPA prohibits all mortgage advertising
- B. The payment and repayment period trigger Regulation Z disclosures
- C. ECOA prohibits stating any loan term
- D. There is no issue if the advertised payment is possible
Show answer and explanation →
Answer: B. The payment and repayment period trigger Regulation Z disclosures
A stated payment amount and repayment period are credit advertising trigger terms. Required additional disclosures help consumers understand the full borrowing terms.
- A. Incorrect. RESPA does not impose a blanket ban on mortgage advertising.
- B. Correct. The advertisement must include the required additional credit terms rather than only its payment pitch.
- C. Incorrect. ECOA governs credit discrimination, not a ban on all advertised terms.
- D. Incorrect. An available payment amount does not excuse omitting triggered disclosures.
Question 7A buyer closes a loan used to purchase a principal residence and assumes TILA gives a routine three-day right to cancel that purchase mortgage. Is that correct?
- A. Yes, every mortgage has three-day rescission
- B. Yes, but only if the deed has not been recorded
- C. No, a purchase residential mortgage transaction is generally exempt from that rescission right
- D. No, TILA never provides any rescission right
Show answer and explanation →
Answer: C. No, a purchase residential mortgage transaction is generally exempt from that rescission right
The purchase mortgage is generally exempt from TILA rescission. Certain nonpurchase transactions secured by a principal dwelling can carry that right.
- A. Incorrect. The rescission rules include transaction-specific exemptions.
- B. Incorrect. Recording does not change the purchase-transaction exemption.
- C. Correct. The acquisition purpose makes this a generally exempt residential mortgage transaction.
- D. Incorrect. TILA does provide rescission in certain covered transactions, so the blanket denial is too broad.
Question 8A creditor receives the six application items for a covered mortgage on Friday, October 16, 2026. Its offices carry out substantially all business functions Monday through Friday. No holiday intervenes. By when must it deliver or mail the initial Loan Estimate?
- A. Monday, October 19
- B. Tuesday, October 20
- C. Wednesday, October 21
- D. Friday, October 23
Show answer and explanation →
Answer: C. Wednesday, October 21
For this initial delivery-or-mailing deadline, use the creditor's business days. Do not count the application day. Monday is day one, Tuesday day two, and Wednesday day three. This is not a requirement for the consumer to receive it by Wednesday.
- A. Incorrect. Monday is the first business day after this application, not the third.
- B. Incorrect. Tuesday is the second qualifying business day.
- C. Correct. Wednesday is the third creditor business day; delivery or mailing by then meets this timing rule.
- D. Incorrect. A later date would miss the stated three-business-day deadline.
Question 9A consumer receives the Closing Disclosure in person on Wednesday, October 21, 2026. The Loan Estimate waiting period has already been met. There are no legal public holidays and no emergency waiver. What is the earliest consummation date permitted by this three-business-day waiting rule, even if the lender's office is closed on Saturday?
- A. Friday, October 23
- B. Saturday, October 24
- C. Monday, October 26
- D. Wednesday, October 28
Show answer and explanation →
Answer: B. Saturday, October 24
For the Closing Disclosure waiting period, business days include Saturday and exclude Sundays and the specified legal public holidays. After Wednesday receipt, count Thursday, Friday, and Saturday. The rule permits Saturday; an actual closing still has to be arranged.
- A. Incorrect. Friday is only the second business day after Wednesday receipt.
- B. Correct. Thursday is day one, Friday day two, and Saturday day three.
- C. Incorrect. Closing the lender's office on Saturday does not remove Saturday from this waiting-period definition.
- D. Incorrect. In-person receipt is established, so no assumed mailing delay should be added.
Question 10A lender mails a Closing Disclosure on Monday, October 19, 2026. There is no evidence of earlier receipt, no intervening legal public holiday, and no waiver. The separate Loan Estimate waiting period has been met. Using the presumed-receipt rule, what is the earliest permitted consummation date?
- A. Thursday, October 22
- B. Friday, October 23
- C. Saturday, October 24
- D. Monday, October 26
Show answer and explanation →
Answer: D. Monday, October 26
Presumed receipt occurs three business days after mailing: Tuesday, Wednesday, Thursday. Then allow the three-business-day waiting period after Thursday receipt: Friday, Saturday, Monday. Sunday does not count. Mailing and receipt are separate events.
- A. Incorrect. Thursday is the presumed receipt date, not the end of the following waiting period.
- B. Incorrect. Friday is only the first business day after presumed receipt.
- C. Incorrect. Saturday is the second business day after presumed receipt.
- D. Correct. Presumed receipt Thursday plus Friday, Saturday, and Monday gives October 26.
Question 11All charges in a covered loan's 10% aggregate-tolerance category were actually performed. Their valid estimated total is $1,000 and their actual total is $1,090. One included fee rose from $200 to $240. No other issue is stated. Does that fee's 20% increase alone breach the aggregate limit?
- A. Yes, every individual fee has its own 10% limit
- B. No, the combined increase is 9% and the category is tested in the aggregate
- C. Yes, any increase requires a new three-day Closing Disclosure wait
- D. No, these charges may increase without any limit
Show answer and explanation →
Answer: B. No, the combined increase is 9% and the category is tested in the aggregate
The 10% test compares the combined applicable charges, not each fee separately. The total rose by $90 on $1,000, or 9%, below the $1,100 aggregate ceiling. The category assumptions matter; this result cannot be applied to a zero-tolerance fee.
- A. Incorrect. A single included fee may rise by more than 10% when the category total stays within the permitted aggregate increase.
- B. Correct. The $90 combined increase is 9%; the stated category remains within its aggregate limit.
- C. Incorrect. An ordinary fee change does not by itself establish one of the specific new-wait triggers.
- D. Incorrect. This category has an aggregate limit; it is not an unlimited-change category.
Question 12A covered Loan Estimate lists a $500 creditor origination charge. The creditor raises that same charge to $550. There is no valid basis for a revised estimate and no other exception applies. Can the creditor justify it solely because total settlement costs rose by less than 10%?
- A. Yes, every settlement charge belongs in one 10% basket
- B. Yes, if the consumer sees the increase on the Closing Disclosure
- C. No, this creditor charge is subject to the general no-increase rule on these facts
- D. No, because every fee change automatically cancels the loan
Show answer and explanation →
Answer: C. No, this creditor charge is subject to the general no-increase rule on these facts
A charge paid to the creditor generally falls under the no-increase good-faith rule. The stated facts exclude a valid revision or exception. Keeping other settlement costs low, or merely disclosing the increase, does not change this charge's category.
- A. Incorrect. The 10% aggregate category does not include every settlement charge.
- B. Incorrect. Disclosure of an increase does not by itself make the estimate compliant.
- C. Correct. The charge and stated assumptions place this increase outside the permitted general rule.
- D. Incorrect. A tolerance issue does not automatically cancel the loan; compliance and any required cure are separate matters.
Ready to move on?
You are ready for the next lesson when all of these are true.
- Explain Federal Lending Laws: TILA, RESPA, ECOA, and TRID in one clear answer without notes.
- Separate TILA and Regulation Z from RESPA and Regulation X using a fresh example.
- Apply the decision rule to a new fact pattern and name the fact that controls the result.
- State the Georgia-specific point or explain why the national rule applies unchanged.
- Answer every practice question and explain the rule each rejected option misapplies.
- Revisit this topic later in mixed practice without category labels.
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Return to the Financing hub to see every official branch and the complete lesson sequence for this content area.