Federal Law and Regulation
Federal law questions reward precision about timing, thresholds, and who must receive what. Two disclosure regimes drive most of the test. RESPA (Regulation X) governs the Loan Estimate, Closing Disclosure, settlement charges, escrow accounts, and Section 8's ban on giving or receiving anything of value for referrals. TILA (Regulation Z) governs the APR, finance charge, right of rescission, high-cost (HOEPA) loans, and ability to repay. TRID merges them into one flow.
Timing rules to memorize: the LE must be delivered or placed in the mail no later than three business days after application, and the consumer must receive it at least seven business days before consummation. The CD must be received at least three business days before consummation, and a revised LE caused by a changed circumstance must be received four business days before consummation.
Fair lending statutes are tested through notice and timing. ECOA/Regulation B requires a notice of action taken within 30 days of a completed application. HMDA/Regulation C requires collection and reporting of demographic data. The Fair Housing Act bars discrimination in the sale, rental, and financing of dwellings. The SAFE Act requires licensing and the unique identifier on advertising and documents.
Traps: 'business day' has two definitions under Regulation Z; there is no three-day rescission on a purchase-money loan; Section 8 reaches anything of value, not just cash; and a changed circumstance does not by itself reset a clock - a revised disclosure does.
Rule of thumb: clocks run from receipt, not sending. Worked example: application taken Monday, LE mailed Tuesday and presumed received Thursday - consummation cannot occur until the following Thursday, and the CD must be in the borrower's hands by the Monday before.