NC Post Licensing 302 Elite Prep Guide:
Detailed Answer Key, Scenario-Based
Practice Questions & Exam Review Toolkit
Topic 2: Closing Procedures, Prorations,
RESPA & TRID.
Q1. Who is authorized to conduct a real estate closing in North Carolina?
A) Any licensed real estate broker
B) The buyer's lender only
C) A licensed North Carolina attorney
D) The seller's agent
✔ Correct Answer: C
NC is an attorney closing state. Only a licensed NC attorney (or a party acting pro se) may
conduct a real estate closing.
Q2. Which federal law requires the Good Faith Estimate (now Loan Estimate) and Closing
Disclosure?
A) Truth in Lending Act (TILA) only
B) Real Estate Settlement Procedures Act (RESPA) only
C) TILA and RESPA combined under TRID
D) Fair Housing Act
✔ Correct Answer: C
TRID (TILA-RESPA Integrated Disclosure) combined the Good Faith Estimate and initial TILA
disclosure into the Loan Estimate, and the HUD-1 and final TILA into the Closing Disclosure.
Q3. The Closing Disclosure (CD) must be provided to the borrower at least:
A) 1 business day before closing
B) 3 business days before closing
C) 5 business days before closing
D) 7 calendar days before closing
,✔ Correct Answer: B
TRID requires the borrower to receive the Closing Disclosure no later than 3 business days before
consummation (closing).
Q4. Which of the following changes to the Closing Disclosure triggers a new 3-business-day
waiting period?
A) Changing the closing time by 2 hours
B) A 0.25% increase in interest rate
C) Changing the seller's name spelling
D) Changing the earnest money amount by $100
✔ Correct Answer: B
*Changes that trigger re-disclosure include: APR increase of more than 1/8% for fixed-rate
loans, addition of a prepayment penalty, or change in loan product.*
Q5. Under RESPA, what is the maximum amount a lender may require for escrow reserves at
closing?
A) 2 months of taxes and insurance
B) 3 months of taxes and insurance
C) 6 months of taxes and insurance
D) No limit
✔ Correct Answer: C
*RESPA limits escrow account cushions to no more than 1/6 of total annual disbursements (2
months). At closing, a maximum of 3 months may be collected.*
Q6. A property tax proration is calculated using $4.50 per day. Settlement date is March 13 (not
leap year). Seller has not prepaid taxes. What is the seller's portion?
A) $324.00
B) $324.00 charged to seller, buyer gets credit
C) $324.00 charged to buyer
D) $1,318.50 to seller
✔ Correct Answer: B
*Jan 1 to Mar 13 = 72 days × $4.50 = $324. Seller owes for 72 days. Since seller hasn't prepaid,
seller is charged $324 at closing, buyer gets a credit.*
, Q7. In the same proration, what is the buyer's portion?
A) $324.00
B) $1,318.50
C) $1,642.50
D) $0
✔ Correct Answer: B
*Mar 14 to Dec 31 = 293 days × $4.50 = $1,318.50. Buyer pays this at closing.*
Q8. Who typically selects the closing attorney in NC?
A) The buyer's lender
B) The listing broker
C) The buyer (or buyer's lender)
D) The seller
✔ Correct Answer: C
In NC, the buyer or the buyer's lender typically selects the closing attorney, though custom varies
by region.
Q9. The settlement statement used under TRID for most residential loans is called:
A) HUD-1
B) Closing Disclosure (CD)
C) Good Faith Estimate (GFE)
D) Truth in Lending (TIL)
✔ Correct Answer: B
The Closing Disclosure replaced the HUD-1 for most residential mortgage loans under TRID.
Q10. Which transaction still uses the HUD-1 instead of the Closing Disclosure?
A) Purchase with conventional loan
B) Purchase with FHA loan
C) Reverse mortgage
D) Cash sale
Detailed Answer Key, Scenario-Based
Practice Questions & Exam Review Toolkit
Topic 2: Closing Procedures, Prorations,
RESPA & TRID.
Q1. Who is authorized to conduct a real estate closing in North Carolina?
A) Any licensed real estate broker
B) The buyer's lender only
C) A licensed North Carolina attorney
D) The seller's agent
✔ Correct Answer: C
NC is an attorney closing state. Only a licensed NC attorney (or a party acting pro se) may
conduct a real estate closing.
Q2. Which federal law requires the Good Faith Estimate (now Loan Estimate) and Closing
Disclosure?
A) Truth in Lending Act (TILA) only
B) Real Estate Settlement Procedures Act (RESPA) only
C) TILA and RESPA combined under TRID
D) Fair Housing Act
✔ Correct Answer: C
TRID (TILA-RESPA Integrated Disclosure) combined the Good Faith Estimate and initial TILA
disclosure into the Loan Estimate, and the HUD-1 and final TILA into the Closing Disclosure.
Q3. The Closing Disclosure (CD) must be provided to the borrower at least:
A) 1 business day before closing
B) 3 business days before closing
C) 5 business days before closing
D) 7 calendar days before closing
,✔ Correct Answer: B
TRID requires the borrower to receive the Closing Disclosure no later than 3 business days before
consummation (closing).
Q4. Which of the following changes to the Closing Disclosure triggers a new 3-business-day
waiting period?
A) Changing the closing time by 2 hours
B) A 0.25% increase in interest rate
C) Changing the seller's name spelling
D) Changing the earnest money amount by $100
✔ Correct Answer: B
*Changes that trigger re-disclosure include: APR increase of more than 1/8% for fixed-rate
loans, addition of a prepayment penalty, or change in loan product.*
Q5. Under RESPA, what is the maximum amount a lender may require for escrow reserves at
closing?
A) 2 months of taxes and insurance
B) 3 months of taxes and insurance
C) 6 months of taxes and insurance
D) No limit
✔ Correct Answer: C
*RESPA limits escrow account cushions to no more than 1/6 of total annual disbursements (2
months). At closing, a maximum of 3 months may be collected.*
Q6. A property tax proration is calculated using $4.50 per day. Settlement date is March 13 (not
leap year). Seller has not prepaid taxes. What is the seller's portion?
A) $324.00
B) $324.00 charged to seller, buyer gets credit
C) $324.00 charged to buyer
D) $1,318.50 to seller
✔ Correct Answer: B
*Jan 1 to Mar 13 = 72 days × $4.50 = $324. Seller owes for 72 days. Since seller hasn't prepaid,
seller is charged $324 at closing, buyer gets a credit.*
, Q7. In the same proration, what is the buyer's portion?
A) $324.00
B) $1,318.50
C) $1,642.50
D) $0
✔ Correct Answer: B
*Mar 14 to Dec 31 = 293 days × $4.50 = $1,318.50. Buyer pays this at closing.*
Q8. Who typically selects the closing attorney in NC?
A) The buyer's lender
B) The listing broker
C) The buyer (or buyer's lender)
D) The seller
✔ Correct Answer: C
In NC, the buyer or the buyer's lender typically selects the closing attorney, though custom varies
by region.
Q9. The settlement statement used under TRID for most residential loans is called:
A) HUD-1
B) Closing Disclosure (CD)
C) Good Faith Estimate (GFE)
D) Truth in Lending (TIL)
✔ Correct Answer: B
The Closing Disclosure replaced the HUD-1 for most residential mortgage loans under TRID.
Q10. Which transaction still uses the HUD-1 instead of the Closing Disclosure?
A) Purchase with conventional loan
B) Purchase with FHA loan
C) Reverse mortgage
D) Cash sale
