Loan Officer Practice Exam 2026 – Comprehensive All-in-One Guide for Exam Success!

The most accurate response is that a lender must inform a denied mortgage loan applicant that they can request a specific reason for denial. This aligns with federal regulations, such as the Equal Credit Opportunity Act (ECOA) and the Fair Credit Reporting Act (FCRA), which mandate that lenders provide a statement of the reasons for denial when a mortgage application is rejected. This requirement ensures transparency and helps the applicant understand the factors that influenced the lender's decision. By informing them of their right to request this information, lenders facilitate a process that not only promotes fairness but also allows denied applicants to correct any potential issues in their credit profiles or financial situations before reapplying.

The other options—such as requesting copies of credit reports, knowing the status of their application, or getting details of adverse action—while potentially relevant, do not capture the essential requirement to provide a specific reason for denial, which is critical for applicants to understand their standing and options moving forward.