What must a lender provide at least 3 business days prior to settlement?

The correct answer is that a lender must provide the Closing Disclosure at least 3 business days prior to settlement. This requirement is established by the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA), which aim to enhance transparency in the lending process and help borrowers understand the terms of their mortgage before finalizing the transaction.

The Closing Disclosure details the final terms of the loan, including the costs associated with closing, the loan's interest rate, monthly payment amount, and other essential financial information. By providing this document ahead of time, borrowers have the opportunity to review and ask questions about the charges and terms of the loan, ensuring that they are fully informed before they proceed with the closing.

While the Loan Estimate is an important document, it is provided earlier in the loan process, usually within three business days of the loan application, not at the time of settlement. Pre-approval notifications and final settlement statements, while relevant to the overall transaction, do not have the same specific timing requirements prior to settlement as the Closing Disclosure does.