Dodd-Frank Act Flashcards
1
Q
Dodd-Frank Act
A
Passed in 2010 in response to the financial crisis. It contains sweeping reforms of many financial industries.
The effects upon the mortgage industry include the following:
- Establishment of the Consumer Financial Protection Bureau (CFPB)
- Authorization of the Qualified Mortgage Rule (QM)
- Requiring an assessment of the borrower’s ability to repay a mortgage (i.e., establishment of the Ability to Repay Rule)
- Restricts loan originator compensation (i.e., authorizing the Loan Originator Compensation Rule)
- Requires new borrower disclosures to replace GFE and TILA disclosures (i.e., TILA-RESPA Integrated Disclosure Rule)
- Limits loan terms such as prepayment penalties, negative amortization, balloons, etc.
