A small creditor originates a balloon mortgage that meets all other QM requirements. The balloon payment is due after 7 years, and the creditor holds the loan in portfolio. Can this loan qualify as a QM?
Correct Answer
B) Yes, if the small creditor meets specific criteria and holds the loan
Under 12 CFR 1026.43(f), small creditors can originate balloon-payment QM loans if they meet specific criteria including operating predominantly in rural or underserved areas, originating 2,000 or fewer first-lien mortgages annually, and holding the loan in portfolio for at least three years.
Why This Is the Correct Answer
Under 12 CFR 1026.43(f), small creditors can originate balloon-payment QM loans if they meet specific criteria including operating predominantly in rural or underserved areas, originating 2,000 or fewer first-lien mortgages annually, and holding the loan in portfolio for at least three years.
More Federal Laws Questions
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A borrower receives a Loan Estimate for a fixed-rate mortgage with a loan amount of $300,000, an interest rate of 4.5%, and total loan costs of $6,000. What must be included in the finance charge calculation under TILA?
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