Closing questions cover title, insurance, the documents signed at the table, prepaid interest and the first payment date, rescission before funding, and what happens after closing. Many are short and factual; some test timing.
Mortgage loan origination activities·4 min read·8 sections
★
Must-know for the exam
✓Clear to close comes after every underwriting condition is satisfied; the Closing Disclosure waiting period still applies.
✓The settlement agent runs the closing and disburses funds; the creditor stays responsible for the Closing Disclosure (12 CFR 1026.19(f)(1)(v)).
✓A title commitment lists requirements and exceptions; the lender's policy protects the lender, the owner's policy the buyer.
✓Flood notice goes to the borrower a reasonable time before closing; 10 days is the agencies' benchmark (42 U.S.C. 4104a).
✓Prepaid interest runs from closing to month-end; the first payment is due the first of the second month.
✓The promissory note is the promise to pay; the mortgage or deed of trust secures it; the seller's deed transfers title.
✓Recording gives public notice and protects lien priority.
✓Rescindable refinances fund only after the third business day ends (12 CFR 1026.23(c)).
✓Reverse mortgages still use the HUD-1, not the Closing Disclosure (12 CFR 1024.5(d)).
✓A new loan owner must notify the borrower within 30 days (12 CFR 1026.39).
▸On this page · 8 sections
⚠
Traps that cost marks
→Thinking clear to close means the borrower can sign the same day regardless of the CD timing.
→Thinking the settlement agent makes credit decisions.
→Confusing the title commitment with the final title policy.
→Thinking the lender's policy also protects the buyer.
→Confusing a cloud on title with a lis pendens.
→Confusing the chain of title with the closing signing order.
→Using a subordination to remove an old lien.
→Thinking a survey establishes market value.
Why it matters on the test
Closing is where every earlier step comes together. The test checks that you know who does what at the table, why each document matters, and when money may move.
