What type of loans does Title 14 of the Dodd-Frank Act specifically regulate?

Study for the CFPB Mortgage Compliance Test. Learn with detailed quizzes and flashcards. Understand the key concepts, regulations, and guidelines with comprehensive explanations. Get ready to ace your exam!

Title 14 of the Dodd-Frank Act is primarily focused on defining regulations associated with non-qualified mortgages (Non-QM loans). This part of the Act establishes a framework for mortgage lending standards, especially those that do not meet the criteria set for Qualified Mortgages. Non-QM loans are designed for borrowers who may not fit into the traditional underwriting criteria, such as those with alternative income verification methods or unique financial situations.

The significance of Title 14 lies in its aim to ensure consumer protections while accommodating a wider range of lending practices that may not conform to the stricter Qualified Mortgage standards. This includes flexibility for lenders to offer loans with characteristics that do not typically qualify under the standard guidelines, thereby enabling borrowers access to credit options that suit their specific needs.

Qualified Mortgages, subprime loans, and adjustable-rate loans are regulated under different criteria and sections of the Dodd-Frank Act or other legislation, but Title 14 specifically targets the nuances of Non-QM loans. This distinction is crucial for professionals in the mortgage industry to ensure compliance with applicable regulations when dealing with diverse loan types.

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