Company: BLNE
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001641172-25-004793
Chunk: 632

Company: Beeline Holdings, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 2
Chunk 632
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 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 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
from a consumer or another person in connection with the same transaction, imposes certain loan originator qualification and identification
requirements, and imposes certain loan originator compensation recordkeeping requirements, among other things.

Beeline is also supervised by regulatory agencies
under state law. From time-to-time, Beeline receives examination requests from the states in which Beeline is licensed. State attorneys