A lender asks how to handle the missing reference rate for NC high-cost home loan calculations. What is the best conclusion under North Carolina MLO law or NCCOB guidance?
Correct Answer
A) NCCOB FAQ gives official guidance allowing APOR under 12 C.F.R. 1026.35 as a reasonable replacement reference during the North Carolina high-cost home loan transition.
NCCOB FAQ gives official guidance allowing APOR under 12 C.F.R. 1026.35 as a reasonable replacement reference during the North Carolina high-cost home loan transition. NCCOB FAQ provides official guidance on North Carolina high-cost home loan/APOR calculation during transition to a new 12 CFR 1026.35(a) reference.
Why This Is the Correct Answer
NCCOB FAQ gives official guidance allowing APOR under 12 C.F.R. 1026.35 as a reasonable replacement reference during the North Carolina high-cost home loan transition. NCCOB FAQ provides official guidance on North Carolina high-cost home loan/APOR calculation during transition to a new 12 CFR 1026.35(a) reference.
Why the Other Options Are Wrong
Option B: Treat advertising and consumer-protection controls as optional because the company has a general North Carolina compliance policy.
Treat advertising and consumer-protection controls as optional because the company has a general North Carolina compliance policy. is not correct because the governing rule requires the compliant answer shown in the explanation.
Option C: Postpone the North Carolina advertising and consumer-protection controls issue until the next annual review.
Postpone the North Carolina advertising and consumer-protection controls issue until the next annual review. is not correct because the governing rule requires the compliant answer shown in the explanation.
Option D: Use only the federal baseline and ignore the separate North Carolina state requirement.
Use only the federal baseline and ignore the separate North Carolina state requirement. is not correct because the governing rule requires the compliant answer shown in the explanation.
Memory Technique
NC -> nc-servicing-prohibited-acts-advertising-and-high-cost
Exam Tip
Use official NCCOB APOR guidance for this transition issue.
Common Mistakes to Avoid
- -Using a national baseline answer when North Carolina has a state-specific rule
- -Confusing company licensing, MLO licensing, and sponsorship
- -Treating an exemption or temporary authority rule as a blanket waiver
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