West Virginia Mortgage Law Practice Test

Which document must be provided to a borrower within three business days of receiving a completed mortgage loan application to comply with the Truth in Lending Act?

1. Closing Disclosure

2. Loan Estimate

3. Notice of Right to Rescind

4. Servicing Disclosure Statement

The correct answer is: Closing Disclosure

To comply with the Truth in Lending Act (TILA), the document that must be provided to a borrower within three business days of receiving a completed mortgage loan application is the Loan Estimate. This form is crucial because it provides borrowers with key information about the loan they are applying for, including the estimated interest rate, monthly payment, and total closing costs. The Loan Estimate allows borrowers to compare offers from different lenders, facilitating informed decisions regarding their mortgage options. The requirement for lenders to give this document within three business days ensures timely communication and transparency, which are essential in the lending process. The Closing Disclosure, while also an important document in the mortgage process, is provided much later — at least three business days before closing. The Notice of Right to Rescind applies primarily to certain types of transactions, particularly those involving a refinance where the borrower has the right to cancel the transaction within a specific timeframe. The Servicing Disclosure Statement informs borrowers about the lender's rights to transfer the servicing of the loan, but it is not required within the initial three-day window following a completed application. Therefore, the Loan Estimate is the correct answer, as it aligns directly with the stipulations outlined in TILA for initial disclosures.