Which of the following mortgage loan types creates a presumption that the loan complies with ability to repay standards quizlet?
Which of the following mortgage loan types creates a presumption that the loan complies with ability-to-repay standards? The answer is qualified mortgage.
What loans does ability to repay apply to?
In part, the rules set out an “ability to repay” (ATR) requirement for virtually all closed-end residential mortgage loans. (A “closed-end loan” is a loan that must be repaid in full by a specified date.)
What are the 4 types of qualified mortgages?
There are four types of QMs – General, Temporary, Small Creditor, and Balloon-Payment.
What loan types are exempt from ability to repay requirements?
In addition, loans by certain types of creditors or under certain loan programs are exempt from the rule’s ATR requirements: … Loans made by housing finance agencies directly to consumers; Loans made by other creditors under a program administered by a housing finance agency; and.
What is HPA mortgage?
The Homeowners Protection Act (HPA) is a law that protects homeowners from unnecessary payment of private mortgage insurance that they no longer need to pay. The Homeowners Protection Act requires lenders to make certain disclosures to mortgage borrowers about private mortgage insurance.
What does Qualified mortgage mean?
A Qualified Mortgage (QM) is a defined class of mortgages that meet certain borrower and lender standards outlined in the Dodd-Frank regulation. … If a lender makes a Qualified Mortgage available to you it means the lender met certain requirements and it’s assumed that the lender followed the ability-to-repay rule.
What is meant that the borrower is in the position to repay the loan along with interest?
Debt financing is a time-bound activity where the borrower needs to repay the loan along with interest at the end of the agreed period. … Another important feature in debt financing is that the loan is secured or collateralized with the assets of the company taking the loan. This is usually part of the secured loan.
What are the ability to repay states?
The ability-to-repay rule is the reasonable and good faith determination most mortgage lenders are required to make that you are able to pay back the loan. Under the rule, lenders must generally find out, consider, and document a borrower’s income, assets, employment, credit history and monthly expenses.
What does underwriting include in the general lending process?
Assessing the borrower’s eligibility for the loan Discussing loan amount and interest rate with the borrower Monitoring loan account Creating documentation for the borrower to sign.
What are the types of qualified mortgages?
Types of Qualified Mortgages
- Type 1: General QM Loans. So-called “General QM loans” may not contain negative amortization, interest-only, or balloon-payment features. …
- Type 2: Temporary QM Loans. …
- Type 3: Small Creditor QM Loans. …
- Balloon Payments & QM. …
- Safe Harbor vs.
What is rebuttable presumption mortgage?
3 Rebuttable presumption of compliance is a weaker shield from borrower litigation. To rebut the presumption, the. borrower must prove that the lender failed to make a reasonable and good faith determination of the consumer’s. repayment ability at the time of consummation of the mortgage.
What are different types of loan programs in US mortgage?
Various Different Mortgage Loan are:
- Home Loan.
- Loan Against Commercial Property.
- Loan Against Residential Property.
- Land Purchase Loan.
- Loan to purchase another commercial property.
- Lease Rental Discounting.