What loans are now subject to the tangible net benefit test set forth in the Bureaus’ tangible net benefit/ability to pay rule?
• The tangible net benefit test applies to subprime mortgage loans, not all residential mortgage loans. Subprime loans include nontraditional mortgage loans, rate spread home loans and high-rate high-fee loans. Nontraditional mortgage loans are defined as those that allow a borrower to defer repayment of principal or interest.
