The Dodd-Frank Wall Street Reform & Consumer Protection Act (2010)
Subtitle B:
- Ability to Repay (ATR): ****Reverse Mortgages and HELOCS are exempt from ATR requirements under Dodd Frank - Qualified Mortgage- "Safe harbors"(Regulation Z)
Prohibited appraisal actions
- Misrepresenting or mischaracterizing the appraised value of security collateral -Seeking to influence the appraisal or encourage a targeted value -Withholding or threatening to withhold payment for appraisal report contingent on value or loan settlement
Which titles in the Dodd-Frank Act directly impact mortgage lending & investing by setting the regulatory boundaries of the origination and securitization of mortgage loans
- Title IX - Title X - Title XIV (14)
ATR considers a borrower's ability to repay based on a review of
- income - assets - liabilities - type of product & other factors
Every creditor and MLO shall always act in due diligence and consideration when reviewing:
- loans - terms offered - credit history - borrower documentation - considering debt to income ratios, and asset accounts
NAR's Responsible Valuation Policy states that
- persons who perform appraisals of real property shall be licensed or certified by their respective state regulatory agency - he appraisal shall be conducted in accordance with standards established in the Uniform Standards of Professional Appraisal Practice (USPAP)
Title XIV is divided into ______subtitles carried out through TILA
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Qualified Mortgage (QM)
A closed-end mortgage loan secured by a dwelling that meets certain specific underwriting requirements set forth by law under the Qualified Mortgage Rule (QM Rule).
Ability to Repay (ATR)
A potential borrower's ability to afford the purchase of a home.
The Dodd-Frank Wall Street Reform & Consumer Protection Act (2010)
Addresses a broad range of issues that relate to financial and investment activities, including mortgage lending and investing divided into 16 titles.
When is it ok to ask the appraiser about comparable properties?
After the appraisal is finished.
Subtitle F:
Appraisal Activities
The Consumer Financial Protection Act of 2010
Authorizes the creation of the CFPB
Subtitle D:
Creation of the Office of Housing Counseling with HUD ****HUD Approved counseling is REQUIRED and at least 10 local counselors must be listed on the notification
Consumer Financial Protection Bureau-was implemented under
DODD FRANK
Subtitle C:
High Cost Mortgages & disclosure requirements - Prepayment Penalty PPP trigger - Home Ownership & Equity Protection Act (HOEPA) - High Priced Mortgage Loans (HPML)
A loan that exceeds or does not meet qualified Mortgage standards
High Priced Mortgage Loans
Title IX is
Investor Protections and Improvements to the Regulations of Securities
Subtitle H:
Miscellaneous Provisions
Subtitle G
Mortgage Resolutions and Modifications
Subtitle E:
Mortgage Servicing
HUD Approved Counseling
Regulation X required mortgage lenders provide the borrower with a written list of local HUD-approved homeownership counseling organizations no later than 3 business day after receiving an application ****REQUIRED and at least 10 local counselors must be listed on the notification
What's all included under the Dodd-Frank Bill for Mortgage Reform and Anti-Predatory Lending
Residential Mortgage Loan Origination Standards Minimum Standards for Mortgages Appraisal Activities Qualified Mortgage- "Safe harbors" HPML- High Priced Mortgage Loans HOEPA: (Provision of TILA)
Subtitle A:
Residential Mortgage Loan Origination Standards & Anti Predatory Lending - What is a MLO - Steering incentives - MLO compensation - YSP
__________ and _________ are exempt from ATR requirements under Dodd Frank
Reverse Mortgages and HELOCS
Title X is
The Consumer Financial Protection Act of 2010
Title XIV (14) is
The Mortgage Reform and Anti-Predatory Lending Act
this Act bans any payment of YSP or other originator compensation that is based on the interest rate or other terms of the loan
Yield Spread Premium (YSP)
A High Priced Mortgage Loan is
a loan that exceeds or does not meet qualified Mortgage standards
Appraisals are required by
a state licensed or certified appraiser for most transactions above $250,000
An appraisal is
an opinion of value used for real-estate-related financial transactions.
An ________ will typically include the type of property inspection, approaches to value required, and any lender-specific
appraiser's report
Consumer Financial Protection Bureau is responsible for
consumer protection in order to stop mortgage companies and lenders from taking advantage of consumers:
No creditor or MLO shall make any loan without ______________________ and __________________________consideration towards the borrower's ability to repay the loan
due diligence and consideration
The amount of _________ the customer has does NOT affect the ATR
equity
Investor Protections and Improvements to the Regulations of Securities
provisions authorizing stricter regulation of investors and credit rating agencies
The Uniform Standards of Professional Appraisal Practice (USPAP) established
the NAR's Responsible Valuation Policy
The federal ATR Rule sets forth a specific
underwriting factors that mortgage professionals must examine when determining a borrower's ability to repay