Company: BLNE
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001493152-25-023462
Chunk: 132

Company: Beeline Holdings, Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 8
Chunk 132
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 supervisory and enforcement powers with regard to non-depository institutions, such as Beeline
Financial, that engage in the production and servicing of home loans.

The
following discussion should be read in conjunction with the efforts of the Trump Administration to shut down the CFPB. Presently, there
is a lower federal court order enjoining the efforts to eliminate the CFPB, although the order has been appealed.

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 qualified mortgage (“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 the Truth in Lending Act (“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