Which of the following refinance scenarios would most likely FAIL to meet the tangible net benefit requirement?
Correct Answer
D) Refinancing with the same rate and term but adding $50,000 in cash-out for debt consolidation
Under 12 CFR 1026.43(e)(3), a refinance that doesn't improve loan terms but significantly increases the loan amount primarily for cash-out purposes typically fails to provide tangible net benefit, especially when the additional funds aren't for home improvements or other qualifying purposes.
Why This Is the Correct Answer
Under 12 CFR 1026.43(e)(3), a refinance that doesn't improve loan terms but significantly increases the loan amount primarily for cash-out purposes typically fails to provide tangible net benefit, especially when the additional funds aren't for home improvements or other qualifying purposes.
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