Dodd-Frank act
A prepayment penalty cannot be greater than what percent of the outstanding loan balance during the 3rd year of the loan
1%
What are the 8 ATR underwriting factors
1. Current or reasonably expected income 2. Current employment status 3. Monthly mortgage payment 4. Monthly payment on simultaneous loans secured by the property 5. Monthly payments for property taxes and insurance 6. Debts, Alimony, Child support obligations 7. Monthly DTI 8. Credit obligations
A prepayment penalty cannot be greater than what percent of the outstanding loan balance during the first 2 years of the loan
2%
When was Dodd-frank enacted
2010
Creditors must retain records to show compliance with ATR and QM for at least how long
3 years
How long must compensation record be maintained
3 years
Total fees cannot exceed what amount to be a QM
3%
Terms cannot exceed how many years to be a QM
30 years
To meet DTI ratios, what do they have to be, to be a QM
43%
What is a QM(Qualified Mortgage)
ANY residential mortgage that meets ALL of the following factors: That does not result in an increase of balance (NEG. AM) It is not interest only Does not have a balloon payment Must verify ATR Must verify income For ARMs, borrower must qualify based on the max rate in the first 5 years of the loan Meets DTI ratios (43% for QM) Terms cannot exceed 30 years Total fees cannot exceed 3% of the loan amount Can have prepayment penalty within first 36 months only
What does ATR mean
Ability to repay
What is the purpose of Subtitle B under Title XIV
Addresses the minimum underwriting standards for mortgages
If the loan is interest only, Is it a QM
It is not a QM
MLOs are prohibited from steering consumers into what
Loans that the consumer does not have the ability to repay Predatory Characteristics Unqualified mortgages if they do indeed qualify for a qualified mortgage (QM)
For ARMs, borrowers must qualify based on the ___ rate in the first __ years of the loan
Max rate, 5 years
Is Current employment status not an underwriting factor
No, it is
Is Debts, Alimony, Child support obligations not an underwriting factor
No, it is
What can a non-MLO do
Perform purely admin and clerical tasks Perform only Real Estate brokerage activities A person that provides mortgage financing for a sale of 3 properties or less in any 12 month period
What does QM mean
Qualified Mortgage
When a lender issues QM then it receives what if the borrower goes into foreclosure
SAFE HARBOR (legal protection)
Which Subtitle defines who is and who is not a MLO
Subtitle A under title XIV
What can an MLO do
Take a residential mortgage loan application Assist a consumer in obtaining or applying to obtain a mortgage loan Offer to negotiate the terms of a mortgage
With regards to a QM, You can have a prepayment penalty within how many months of the loan
The FIRST 36 months
The CFPB is headed a director who is appointed by who
The POTUS
Subtitle A under Title XIV states that no MLO shall receive compensation that varies based on the terms of the loan. What is the ONLY exception
The loan amount
Subtitle A: A MLO can get compensated based on what
The number of loans the MLO originates
Which Title Restricts unfair, deceptive or abusive acts and practices, Takes consumer complaints, promotes financial education, and researches the consumer behavior
Title X(10)
Which Title transfers regulatory authority from other federal regulatory agencies to the CFPB and outlines the Bureau's regulatory and enforcement responsibilities
Title X(10)
Who authorized the creation of the CFPB (Consumer Financial Protection Bureau)
Title X(10)
Subtitle F under is under what title and what does it address
Title XIV Appraisal Activities
Subtitle D under is under what title and what did it authorize the creation of
Title XIV Authorized the creation of an Office of Housing counseling within HUD
Subtitle C under is under what title and what does it address
Title XIV High Cost Mortgages
Subtitle H under is under what title and what does it address
Title XIV Miscellaneous Provisions
Subtitle G under is under what title and what does it address
Title XIV Mortgage Resolution and Modification
Subtitle E under is under what title and what does it address
Title XIV Mortgage Servicing
Which Subtitle puts limitations on MLO compensation
Title XIV(14)
Which Title provisions apply directly to mortgage originators, servicers and appraisers, specifically loan originators who are not affiliated with depository institutions
Title XIV(14)
Which Title sets Residential Mortgage Loan Origination standards, minimum underwriting standards for mortgages, appraisal activities, and defines who is and who is not considered a MLO
Title XIV(14)
What is the Dodd-Frank acts purpose
To protect consumers from abusive financial service practices (put in place to modify/change other laws)
What is Dodd-frank also known as
Wall Street Reform and Consumer Protection Act
Can a MLO offer to negotiate the terms of a mortgage
Yes
Can a non-MLO provide mortgage financing for a sale of 3 properties or less in any 12 month period
Yes
Is Current or reasonably expected income an underwriting factor
Yes
Is Monthly mortgage payment an underwriting factor
Yes