Under anti-steering provisions, what constitutes a 'risky feature' that would disqualify a loan from the 'lowest rate without risky features' category?
Correct Answer
C) Interest-only payments during any part of the loan term
Under the anti-steering provisions, risky features include interest-only payments, negative amortization, prepayment penalties (with certain exceptions), terms exceeding 30 years, and points and fees exceeding specified thresholds. Interest-only payment options are specifically identified as risky features.
Why This Is the Correct Answer
Under the anti-steering provisions, risky features include interest-only payments, negative amortization, prepayment penalties (with certain exceptions), terms exceeding 30 years, and points and fees exceeding specified thresholds. Interest-only payment options are specifically identified as risky features.
More Origination Questions
A borrower has a construction-to-permanent loan with a 12-month construction phase. At month 10, construction is only 60% complete due to delays. What is the most likely outcome?
For a construction-to-permanent loan, when must the initial Closing Disclosure be provided for the construction phase?
During a refinance transaction, the appraiser determines that significant unpermitted additions were made to the property. The appraiser wants to discuss this with the MLO before finalizing the report. What should the MLO do?
An appraiser discovers that a property has significant foundation issues that were not disclosed. The appraiser reduces the property value by $25,000 and includes detailed comments about the structural problems. The loan officer is upset because this will kill the deal. Under AIR, the loan officer:
An MLO's compensation structure includes higher payments for certain loan products. When is it acceptable to recommend these higher-compensated products?
People Also Study
Federal Mortgage-Related Laws
23% of exam
General Mortgage Knowledge
23% of exam
Ethics, Fraud & Consumer Protection
17% of exam
Uniform State Test Content
12% of exam
Previous Question
Under the TRID rule, which of the following fees has zero tolerance for increases between the Loan Estimate and Closing Disclosure?
Next Question
A borrower receives a pre-qualification for $300,000 but later applies for a $350,000 loan. The MLO discovers the borrower has been making monthly payments on a student loan that wasn't disclosed during pre-qualification. How does this impact the application process?