29. What types of mortgages are covered by question PM19 regarding consumer protections for an Applicant’s mortgage loan products?

Question PM19 asks a series of questions related to the consumer protection features of an Applicant’s covered mortgage loan products. For purposes of this question PM19, a covered mortgage loan product is limited to a consumer credit transaction that is secured by a lien on a single-family, owner-occupied residence other than:

1. Transactions secured by a subordinate lien;
2. A home equity line of credit subject to 12 CFR 1026.40 and 12 CFR 1026.43(h);
3. A reverse mortgage subject to 12 CFR § 1026.33;
4. A temporary or “bridge” loan with a term of 12 months or less, such as a loan to finance the purchase of a new dwelling where the consumer plans to sell a current dwelling within 12 months or a loan to finance the initial construction of a dwelling;
5. A construction phase of 12 months or less of a construction-to-permanent loan;
6. An extension of credit made pursuant to a program administered by a Housing Finance Agency, as defined under 24 CFR § 266.5;
7. An extension of credit made pursuant to a program administered by the U.S. Department of Housing and Urban Development, the U.S. Department of Veterans Affairs, or the U.S. Department of Agriculture;
8. A transaction that does not require payment of interest;
9. A transaction made for the purpose of foreclosure avoidance or prevention; or
10. For Question PM19.2 (loans with interest-only payments) and Question PM19.3 (loans with balloon payments) only, a transaction with a payment schedule that is adjusted to the seasonal or irregular income of the consumer.

Applicants that offer any of the types of mortgages listed among the above exceptions (i-x) do not need to include those mortgages in their responses to the questions in PM19.

Note that the covered mortgages included in the scope of the questions in PM19 are different than the mortgages covered in the scope of Question PM14. (Cf. Question 22 of this FAQ.) Question PM19 includes additional exceptions not listed under Question PM14 for (i) transactions secured by a subordinate lien and (x) transactions with a payment schedule that is adjusted to the seasonal or irregular income of the consumer, as it relates to loans with interest-only or balloon payments.