What did Title 14 of the Dodd-Frank Act prohibit?

The correct answer highlights a critical consumer protection measure implemented by Title 14 of the Dodd-Frank Act. This title specifically addresses the compensation of loan originators, making it clear that their compensation cannot be based on the terms of the mortgage other than the principal amount. This prohibition aims to curb potential conflicts of interest and ensure that loan originators prioritize the best interests of consumers, rather than manipulating loan terms to maximize their own commissions.

By limiting how loan compensation can be structured, the Dodd-Frank Act seeks to promote transparency and ethical practices within the mortgage industry, thereby safeguarding borrowers from potentially predatory lending practices that could arise if compensation structures allowed for incentives tied to various less favorable loan terms.

Other choices, while related to broader mortgage compliance concerns, do not directly reflect the specific prohibitions enacted by Title 14. For instance, the prohibition of non-QM loans, use of ability to pay provisions in foreclosure cases, and the notion surrounding manual underwriting systems address different aspects of mortgage regulation and consumer protection, but they do not encapsulate the particular focus on loan originator compensation that is central to Title 14.