15 U.S.C. §1639c — Minimum standards for residential mortgage loans

tila-12usc-1639c

TILA statutory ATR/QM provision (Dodd-Frank §1411–1414). Sets the ability-to-repay requirement, the qualified-mortgage safe-harbor / rebuttable-presumption framework, the prohibition on prepayment penalties on non-QMs and the phase-out on QMs, and the prohibition on single-premium credit insurance. Implemented in Regulation Z at 12 CFR §1026.43.

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source:
  type: regulation
  id: tila-12usc-1639c
  authority: 15 U.S.C. §1639c — Minimum standards for residential mortgage loans
  description: |
    TILA statutory ATR/QM provision (Dodd-Frank §1411–1414). Sets the
    ability-to-repay requirement, the qualified-mortgage safe-harbor /
    rebuttable-presumption framework, the prohibition on prepayment
    penalties on non-QMs and the phase-out on QMs, and the prohibition
    on single-premium credit insurance. Implemented in Regulation Z at
    12 CFR §1026.43.
obligations:
  - id: tila-15usc-1639c-a1-ability-to-repay
    canonical_id: tila-15usc-1639c-a1-ability-to-repay
    section: 15 U.S.C. §1639c(a)(1) — Ability-to-repay determination
    description: |
      [LENDER] (as a creditor under TILA) shall not make a residential
      mortgage loan unless [LENDER] makes a reasonable and good faith
      determination, based on verified and documented information, that
      at the time the loan is consummated the consumer has a reasonable
      ability to repay the loan according to its terms and all
      applicable taxes, insurance (including mortgage guarantee
      insurance), and assessments.
    type: do
    audit_question: For every residential mortgage loan originated by [LENDER], can [LENDER] evidence a reasonable and good faith ability-to-repay determination based on verified and documented information covering credit history, current income, expected income, current obligations, DTI or residual income, employment status, and other financial resources, made as of the consummation date?
    program_review: Do the P&Ps ensure no residential mortgage loan is made without a reasonable and good-faith ability-to-repay determination, based on verified and documented information, that at consummation the consumer can repay the loan according to its terms and all applicable taxes, insurance (including mortgage-guarantee insurance), and assessments?
    file_review: Review the whole file; the compliance person judges whether the as-of-consummation ATR determination was reasonable and in good faith on verified/documented information (credit history, current and expected income, current obligations, DTI or residual income, employment, other resources).
    judgment: true
    feeds: []
    workflow_phase: origination
    owner_role: compliance_officer
    secondary_owner_role: default_servicing_analyst
    cadence: per-loan
    consequence: ''
    tags:
      - round-b
      - regulator-direct
      - tila
      - atr
      - qm
      - dodd-frank
      - origination
      - promoted
    primary_source:
      tier: 1
      authority: 15 U.S.C. §1639c(a)(1)
      source_class: tila-statute
      source_url: https://www.law.cornell.edu/uscode/text/15/1639c
      snapshot_id: 6ad557a3b8ba908f
      fetched_at: '2026-05-22T11:32:40Z'
      content_hash: sha256:df7753f887f1c21f5074a8caec73f12688e449c4cdf1b94f8b5940d50cd3d9d0
      paragraph_quote: In accordance with regulations prescribed by the Bureau, no creditor may make a residential mortgage loan unless the creditor makes a reasonable and good faith determination based on verified and documented information that, at the time the loan is consummated, the consumer has a reasonable ability to repay the loan, according to its terms, and all applicable taxes, insurance (including mortgage guarantee insurance), and assessments.
      drafter_attestation: |
        Copied verbatim from snapshot 6ad557a3b8ba908f (content.txt) at
        2026-05-22T11:40Z. Substring is the full §1639c(a)(1) operative
        paragraph; the (a)(3) factor list is paraphrased in audit_question.
    promoted_at: '2026-05-22T12:13:36+00:00'
    promoted_from: tila-12usc-1639c-roundb-v1.yaml
  - id: tila-15usc-1639c-b1-qm-presumption
    canonical_id: tila-15usc-1639c-b1-qm-presumption
    section: 15 U.S.C. §1639c(b)(1) — Presumption of compliance for qualified mortgages
    description: |
      Where [LENDER] originates (or any assignee subject to TILA
      liability holds) a residential mortgage loan that is a qualified
      mortgage under §1639c(b)(2), [LENDER] may presume that the loan
      has met the §1639c(a) ability-to-repay requirements. The
      presumption is conclusive (safe harbor) for QMs meeting the
      §1639c(b)(2)(F) covered-institution portfolio safe harbor, and
      rebuttable for higher-priced QMs.
    type: monitor
    audit_question: For every loan [LENDER] treats as a qualified mortgage, can [LENDER] evidence that the loan satisfies the §1639c(b)(2) QM criteria (no negative amortization, no balloon except as permitted, income and resources verified, fully amortizing schedule, 3% points-and-fees cap, term ≤ 30 years, etc.) such that the §1639c(b)(1) presumption applies?
    program_review: Does the overall program account for the QM presumption — treating a loan as presumed §1639c(a)-compliant only where it meets the §1639c(b)(2) QM criteria (no negative amortization, no balloon except as permitted, income/resources verified, fully-amortizing schedule, 3% points-and-fees cap, term ≤30 years, etc.), with the presumption conclusive for the (b)(2)(F) covered-institution portfolio safe harbor and rebuttable for higher-priced QMs?
    file_review: Spot-check QM-treated files; confirm the §1639c(b)(2) criteria are met so the presumption genuinely applies, and that conclusive-vs-rebuttable status was correctly assigned.
    judgment: false
    feeds: []
    workflow_phase: origination
    owner_role: compliance_officer
    secondary_owner_role: default_servicing_analyst
    cadence: per-loan
    consequence: ''
    tags:
      - round-b
      - regulator-direct
      - tila
      - qm
      - safe-harbor
      - dodd-frank
      - origination
      - promoted
    primary_source:
      tier: 1
      authority: 15 U.S.C. §1639c(b)(1)
      source_class: tila-statute
      source_url: https://www.law.cornell.edu/uscode/text/15/1639c
      snapshot_id: 6ad557a3b8ba908f
      fetched_at: '2026-05-22T11:32:40Z'
      content_hash: sha256:df7753f887f1c21f5074a8caec73f12688e449c4cdf1b94f8b5940d50cd3d9d0
      paragraph_quote: Any creditor with respect to any residential mortgage loan, and any assignee of such loan subject to liability under this subchapter, may presume that the loan has met the requirements of subsection (a), if the loan is a qualified mortgage .
      drafter_attestation: |
        Copied verbatim from snapshot 6ad557a3b8ba908f (content.txt) at
        2026-05-22T11:40Z. Substring is the full §1639c(b)(1) operative
        paragraph; §1639c(b)(2) QM definitional clauses are paraphrased
        in description and audit_question.
    promoted_at: '2026-05-22T12:13:36+00:00'
    promoted_from: tila-12usc-1639c-roundb-v1.yaml
  - id: tila-15usc-1639c-c1-prepayment-penalty-prohibited-on-non-qm
    canonical_id: tila-15usc-1639c-c1-prepayment-penalty-prohibited-on-non-qm
    section: 15 U.S.C. §1639c(c)(1)(A) — Prepayment penalty prohibited on non-qualified mortgages
    description: |
      [LENDER] shall not include in any residential mortgage loan that
      is not a qualified mortgage (as defined in §1639c(b)(2)) any
      terms under which a consumer must pay a prepayment penalty for
      paying all or part of the principal after the loan is consummated.
      For QMs that are adjustable-rate or higher-priced under
      §1639c(c)(1)(B), the prohibition also applies because such loans
      are excluded from the QM definition for purposes of the
      prepayment-penalty rule.
    type: dont
    audit_question: For every non-QM residential mortgage loan originated by [LENDER] (and every QM that is adjustable-rate or exceeds the §1639c(c)(1)(B) APOR thresholds), can [LENDER] evidence that no prepayment-penalty term was included in the loan?
    program_review: Does the overall program account for the non-QM prepayment-penalty prohibition — ensuring no prepayment-penalty term is included in any non-QM residential mortgage loan, nor in any QM that is adjustable-rate or exceeds the §1639c(c)(1)(B) APOR thresholds (excluded from the QM definition for this rule)?
    file_review: Pull non-QM files (and adjustable-rate / higher-priced QMs); confirm no prepayment-penalty term was included.
    judgment: false
    feeds: []
    workflow_phase: origination
    owner_role: compliance_officer
    secondary_owner_role: default_servicing_analyst
    cadence: per-loan
    consequence: ''
    tags:
      - round-b
      - regulator-direct
      - tila
      - qm
      - prepayment-penalty
      - dodd-frank
      - origination
      - promoted
    primary_source:
      tier: 1
      authority: 15 U.S.C. §1639c(c)(1)(A)
      source_class: tila-statute
      source_url: https://www.law.cornell.edu/uscode/text/15/1639c
      snapshot_id: 6ad557a3b8ba908f
      fetched_at: '2026-05-22T11:32:40Z'
      content_hash: sha256:df7753f887f1c21f5074a8caec73f12688e449c4cdf1b94f8b5940d50cd3d9d0
      paragraph_quote: A residential mortgage loan that is not a “ qualified mortgage ”, as defined under subsection (b)(2), may not contain terms under which a consumer must pay a prepayment penalty for paying all or part of the principal after the loan is consummated.
      drafter_attestation: |
        Copied verbatim from snapshot 6ad557a3b8ba908f (content.txt) at
        2026-05-22T11:40Z. Substring is the full §1639c(c)(1)(A) operative
        prohibition; (c)(1)(B) QM-exclusion clauses and (c)(3) phase-out
        schedule are paraphrased in description and audit_question.
    promoted_at: '2026-05-22T12:13:36+00:00'
    promoted_from: tila-12usc-1639c-roundb-v1.yaml
_promotion_history:
  - promoted_at: '2026-05-22T12:13:36+00:00'
    candidate_path: C:\Users\earlc\broker-tools\obligations\_remediation\_round_b_drafts\tila-12usc-1639c-roundb-v1.yaml
    candidates_promoted: 3
    candidates_skipped_existing: 0

Verbatim regulatory text (3)

Verbatim provisions from 15 U.S.C. §1639c — Minimum standards for residential mortgage loans — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.

15 U.S.C. §1639c(a)(1) — Ability-to-repay determination

In accordance with regulations prescribed by the Bureau, no creditor may make a residential mortgage loan unless the creditor makes a reasonable and good faith determination based on verified and documented information that, at the time the loan is consummated, the consumer has a reasonable ability to repay the loan, according to its terms, and all applicable taxes, insurance (including mortgage guarantee insurance), and assessments.

Source: 15 U.S.C. §1639c(a)(1) · source URL · snapshot 6ad557a3b8ba908f

15 U.S.C. §1639c(b)(1) — Presumption of compliance for qualified mortgages

Any creditor with respect to any residential mortgage loan, and any assignee of such loan subject to liability under this subchapter, may presume that the loan has met the requirements of subsection (a), if the loan is a qualified mortgage .

Source: 15 U.S.C. §1639c(b)(1) · source URL · snapshot 6ad557a3b8ba908f

15 U.S.C. §1639c(c)(1)(A) — Prepayment penalty prohibited on non-qualified mortgages

A residential mortgage loan that is not a “ qualified mortgage ”, as defined under subsection (b)(2), may not contain terms under which a consumer must pay a prepayment penalty for paying all or part of the principal after the loan is consummated.

Source: 15 U.S.C. §1639c(c)(1)(A) · source URL · snapshot 6ad557a3b8ba908f