Chapter 13 — Further Reading
Sources are grouped by the book's three tiers. Tier 1 is verified canonical material we can stand behind. Tier 2 is real industry practice and benchmarks whose current values change and must be verified at the source. Tier 3 is illustrative and constructed — this book's own teaching material.
If you read only one thing
Regulation Z, 12 CFR 1026.36 — the Loan Originator provisions, and specifically the anti-steering provision and its safe harbor at 1026.36(e), together with the Official Interpretations.
Read it once slowly, with Figure 13.2 next to it. The three loan options the safe harbor describes — lowest interest rate, lowest interest rate without certain risky features, lowest total dollar amount of origination and discount points and fees — are a comparison sheet written by a regulator who was looking at the same problem you are. Understanding why those three and not others will do more for your structure conversations than any sales training you will ever attend. The rule and its commentary are free, current, and searchable at the electronic Code of Federal Regulations and on the CFPB's website.
Tier 1 — Verified canonical
The Truth in Lending Act (TILA) and Regulation Z, 12 CFR part 1026. The authority for the Ability-to-Repay and Qualified Mortgage requirements (1026.43), the loan originator compensation and anti-steering provisions (1026.36), the treatment of points and fees, and the disclosure of the annual percentage rate. §13.7's qualifying-rate rule and §13.9's anti-steering discipline both live here.
The Dodd-Frank Wall Street Reform and Consumer Protection Act (2010), Title XIV — Mortgage Reform and Anti-Predatory Lending Act. The statute behind the loan originator provisions and the Ability-to-Repay requirement. Worth reading for its structure: nearly every rule in this chapter is a response to a specific documented failure.
The Ability-to-Repay / Qualified Mortgage rule. Read the ATR provisions on how an adjustable-rate transaction's payment is calculated for purposes of the repayment-ability determination. This is the material behind the exam question candidates most often miss.
HUD Handbook 4000.1 — FHA Single Family Housing Policy Handbook. The authority for FHA minimum required investment, upfront and annual mortgage insurance premiums, the duration of the annual premium by loan-to-value and term, the upfront premium refund schedule on an FHA-to-FHA refinance, and permitted sources of funds including down-payment assistance. Every FHA figure in this chapter must be verified here, because the premium factors and their duration rules have changed repeatedly.
The Fannie Mae Selling Guide and the Freddie Mac Seller/Servicer Guide. The conventional rulebooks: eligibility, loan-to-value limits, mortgage insurance coverage requirements, interested-party contribution limits, temporary buydown eligibility and qualifying treatment, and reserve requirements. Both are free, public, continuously updated, and the actual authority — not a summary of it.
The Homeowners Protection Act (HPA). The statute governing automatic termination of borrower-paid private mortgage insurance at 78% of original value, borrower-requested cancellation at 80%, and the final termination provision. The source of the payment-137 fact that decides the Linden Street comparison.
The Equal Credit Opportunity Act and Regulation B, and the Fair Housing Act. The independent fair-lending obligation described in §13.9. Presenting different options or different levels of effort to similarly situated applicants on a prohibited basis is a violation regardless of any compensation motive. Chapter 25 is the book's treatment.
The Real Estate Settlement Procedures Act (RESPA) and Regulation X. Relevant here for affiliated business arrangements — the builder's affiliated lender in Case Study 13.2 — and the required disclosure and the prohibition on required use.
The Consumer Financial Protection Bureau's consumer-facing mortgage materials, including its explanations of discount points, lender credits, and adjustable-rate mortgages. Written for borrowers, which makes them unusually useful as a model for the language you should be using at a kitchen table.
Tier 2 — Attributed, specifics unverified or perishable
Mortgage insurance rate cards published by the private mortgage insurers. The structure — a matrix of factors by loan-to-value band, coverage percentage, representative score, loan type, and term — is what you must learn. The values change, and the 0.58% and 0.32% factors used in this chapter are illustrative. Obtain current cards through your lender or directly from the insurers, and note that conventional MI is priced off credit while FHA's premium is not, which is the crossing point §13.2 describes.
Current FHA mortgage insurance premium factors and their duration rules. These have been revised multiple times, in both directions, and a chapter that printed a permanent number would be wrong within a year. Verify at HUD.
Interested-party contribution limits by program, occupancy, and loan-to-value. The \$8,375.40 concession in §13.8 sits inside typical caps at 2.175% of price — but "typical" is not a guideline. Check the applicable guide before promising a borrower any concession.
Your own lender's overlays and product matrices. The single most underused document available to a new loan officer. Overlays are where the published guideline and your actual answer diverge, and Chapter 14 explains the distinction.
Your lender's daily rate sheet and pricing engine. The only current authority on where a borrower lands on a grid. Figure 13.1 is a teaching construction; nothing in it is a quote.
Published market commentary on the 2022–2023 rate cycle and the return of builder-financed buydowns. The phenomenon is real and public; the specific prevalence and size of incentives varied by builder, market, and quarter, and precise figures should be sourced to a named publication and dated rather than carried in memory.
Homeowner tenure and mortgage-life statistics. Frequently quoted, rarely sourced, and genuinely variable across markets and rate environments. The horizon question in §13.6 is asked of the borrower in front of you for exactly this reason — a national median is not an input to a specific file. If you want a benchmark, take it from a named, dated source and treat it as context rather than as a fact about your borrower.
Tier 3 — Illustrative and constructed
The Linden Street file. The \$385,000 purchase, the \$365,750 conventional structure at 6.625% with a half point, the FHA alternative at \$378,026.69, the unavailable 10%-down column, the rate/point grid, the 5/6 ARM illustration, and the \$8,375.40 buydown costing. All constructed for teaching, all internally consistent, none of it current pricing.
The Harlow Street file. The 641-score, single-income, DPA-assisted FHA purchase used in §13.2 and §13.3 to show that the Linden Street answer is about the borrower rather than about the programs.
The Ridgeview Crossing composite in Case Study 13.2 — a labeled composite assembled from patterns that recur across many new-construction transactions, not a report of any particular file.
Figure 13.1 (the pricing-engine grid) and Figure 13.2 (the one-page loan comparison). Constructed teaching documents. Figure 13.2 in particular is worth rebuilding in your own loan origination system on a live file — the exercise of getting every assumption identical across two columns teaches more than reading it does.
A note on how to use these
Two habits separate originators who last from originators who get surprised.
First: go to the primary source, once, for anything that matters. The Selling Guide, Handbook 4000.1, and Regulation Z are free and searchable. A summary of a guideline written by a training company is a picture of what the guideline said on the day it was written.
Second: assume every number in this chapter is stale. The structure is durable — feasibility versus convenience, break-even, the horizon question, the three uses of a concession, present-quantify- recommend-hand back. The values are perishable. Learn the first and look up the second, every time, before you say it to a borrower.