Mortgage Loan Originator (MLO) Licensing Practice Test

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Prepare for the Mortgage Loan Originator Licensing Test with engaging quizzes. Study with multiple-choice questions that include explanations and suggestions. Ace your exam with confidence!

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How many business days prior to closing must a lender deliver an Escrow Closing Notice when a consumer requests cancellation of their escrow account?

0 business days
3 business days
5 business days
10 business days

The correct answer is: 3 business days

When a consumer requests the cancellation of their escrow account, the lender is required to deliver an Escrow Closing Notice at least three business days prior to the closing. This requirement is in line with regulatory guidelines aimed at ensuring transparency and providing borrowers with sufficient notice regarding the status of their escrow account. The three business days allow the consumer to understand the implications of the cancellation and prepare for any changes that may affect their mortgage payment or the associated settlement process. Compliance with this guideline is essential for protecting consumer rights and fostering trust in the lending process. It also helps ensure that all parties are adequately informed before the transaction is finalized.