Loan Officer Practice Exam

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According to Regulation Z, if a borrower closes their loan on January 8th, when can the loan fund?

January 8.
January 12.
January 10.
January 15.

The correct answer is: January 8.

Under Regulation Z, the Truth in Lending Act, there are specific guidelines regarding the timing of loan funding following a loan closing. When a borrower closes a loan, they must be given a three-day right of rescission period if the loan is a refinance of their primary residence. However, if the loan is for a purchase, the loan can fund the same day as closing. In this scenario, since the loan closing occurs on January 8, the funds can be disbursed as early as that same day, assuming all other conditions have been satisfied. This action aligns with the rules regarding the immediate availability of funds once the proper closing documents have been executed and all necessary checks are in place. This clarity in funding timing emphasizes the importance of understanding the nature of the loan transaction and the specific regulations that govern it, making January 8 the appropriate date for loan funding in this case.