Company: BLNE
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001641172-25-004793
Chunk: 11

Company: Beeline Holdings, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1
Chunk 11
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 has targeted the CFPB as an agency
to be eliminated or substantially reduced. As part of its enforcement authority, the CFPB can order, among other things, rescission or
reformation of contracts, the refund of moneys or the return of real property, restitution, disgorgement or compensation for unjust enrichment,
the payment of damages or other monetary relief, public notifications regarding violations, remediation of practices, external compliance
monitoring and civil money penalties. The CFPB has been active in investigations and enforcement actions and has issued large civil money
penalties since its inception to parties the CFPB determines have violated the laws and regulations it enforces.

Effective October 1, 2022, the CFPB revised the definition
of a QM which permits mortgage lenders to gain a presumption of compliance with the CFPB’s ability to repay requirements if a loan
meets certain underwriting criteria. Lenders are now required to comply with a new QM definition in order to receive a safe-harbor or
rebuttable presumption of compliance under the ability-to-repay requirements of TILA and its implementing Regulation Z. The revision to
the QM definition created additional compliance burdens and removed some of the legal certainties afforded to lenders under the prior
QM definition. Specifically, the revised QM rule eliminated the previous requirement limiting QMs to a 43% debt-to-income ratio (“DTI”)
and replaced it with pricing-based thresholds. Loans at 150 basis points or less over the average prime offer rate (“APOR”)
as of the date the interest rate is set, receive a safe harbor presumption of compliance, while loans between 151 and 225 basis points
over the APOR benefit from a rebuttable presumption of compliance. The new rule also created new requirements for a lender to “consider”
and “verify” a borrower’s income and debts and associated DTI, along with several other underwriting requirements. Additionally,
the new QM definition eliminated a path to regulatory compliance that was available for originating loans that were eligible to be sold
to GSEs, which was heavily relied upon by a large segment of the mortgage industry. Due to the transition to the new QM definition, there
may be residual compliance and legal risks associated with the implementation of these new underwriting obligations.

The CFPB’s loan originator compensation rule
prohibits compensating loan originators based on a term of a transaction, prohibits loan originators from receiving compensation directly