Oregon 30-Hour Real Estate Law Practice Test

When is the Closing Disclosure typically provided to the borrower?

1. At least 1 day before closing

2. At the time of contract signing

3. Within 5 days of application

4. After the closing

The correct answer is: At least 1 day before closing

The Closing Disclosure is a critical document that must be provided to the borrower at least 1 day before closing on a real estate transaction. This requirement aligns with the guidelines established by the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA), which aim to ensure that borrowers have adequate time to review the financial details of their mortgage prior to finalizing the purchase of a property. Providing the Closing Disclosure at least one day before closing allows the borrower to carefully examine the loan terms, costs, and other important information. This review period is essential to enable the borrower to ask questions or address any discrepancies before committing to the financial obligations of the mortgage. In contrast, the other options do not align with the regulatory requirements: presenting the Closing Disclosure at the time of contract signing or after closing fails to provide the borrower with the necessary time for review, which could lead to confusion or misunderstandings regarding the loan terms. Furthermore, while the document must be provided within 3 business days of the loan application, this timing pertains more to the Loan Estimate rather than the Closing Disclosure itself. Therefore, the requirement for the Closing Disclosure is distinctly established to occur at least 1 day before the closing event.