A lender receives a mortgage application where the applicant lists 'homemaker' as their occupation but provides no income information. The spouse works and will be a co-borrower. The lender requests income documentation from the homemaker applicant. This request:
Correct Answer
C) Violates Regulation B if the homemaker applicant is not relied upon for qualification
Under Regulation B, a creditor may not require income information from an applicant's spouse unless the spouse will be contractually liable on the account, the applicant is relying on the spouse's income for qualification, or the applicant resides in a community property state. If the homemaker is not being relied upon for qualification, requiring their income documentation may violate the regulation.
Why This Is the Correct Answer
Under Regulation B, a creditor may not require income information from an applicant's spouse unless the spouse will be contractually liable on the account, the applicant is relying on the spouse's income for qualification, or the applicant resides in a community property state. If the homemaker is not being relied upon for qualification, requiring their income documentation may violate the regulation.
More Federal Laws Questions
A mortgage broker's website states 'Qualified borrowers can get loans with down payments as low as 3%.' Which statement about TILA advertising requirements is correct?
A loan's APR increases from 4.25% on the Loan Estimate to 4.35% on the Closing Disclosure due to a rate lock expiration. What action is required?
A lender originates a mortgage that meets all QM requirements. Three years later, the borrower defaults and claims the lender violated the ATR rule. What legal protection does the lender have?
For a closed-end mortgage loan, when must the creditor provide the Closing Disclosure to the borrower?
Which of the following documents must be provided to trigger the start of the 3-day rescission period?
People Also Study
General Mortgage Knowledge
23% of exam
Mortgage Loan Origination Activities
25% of exam
Ethics, Fraud & Consumer Protection
17% of exam
Uniform State Test Content
12% of exam
Previous Question
Under HPML rules, an escrow account must be established for the payment of property taxes and insurance. For how long must this escrow account be maintained?
Next Question
A borrower submits a qualified written request (QWR) asking why their loan was transferred to a new servicer without proper notice. The current servicer, who was not the transferring servicer, must: