RC_LA_SS_300.3 Special Loan Features
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| Option | Price |
| Member | $50.00 |
| Non-Member | $100.00 |
Special Loan Features offer prospective borrowers creative financing tools to modify various loan products. Special loan features include items such as different rate options and interest-only payment options. The terms of these loans are generally more complicated, which makes servicing them interesting and challenging. This course provides an overview of special loan features and looks at advantages and risks for the borrower and the servicer.
This course begins with a look at how products with adjustable interest rates and payment options impact loan servicing, and the servicer's responsibilities when interest rates and payments change. It continues with a detailed discussion of payment-option loans and interest-only payments. It concludes with a discussion of the step rate feature, which allows for more predictability with adjustable-rate loans.
It is important to note that many special or nontraditional mortgage features are far less common in today’s regulatory and economic environment than they were in previous decades. However, as market conditions evolve, some of these features occasionally reappear in limited circumstances.
Nontraditional loan structures were most prevalent in the late 1990s and early to mid-2000s, when lenders introduced a variety of alternative mortgage products designed to expand access to credit. Rising home values during that period increased borrower confidence in their ability to refinance, sell, or tap home equity if payments became difficult to manage.
Following the 2008 financial crisis, the resulting recession, and the implementation of stricter regulations—including the Dodd-Frank Act and the Ability-to-Repay/Qualified Mortgage (ATR/QM) rules—mortgage underwriting and product design became significantly more conservative. As a result, many loan features discussed in this course, such as payment-option structures and loans with negative amortization, are rarely originated today.
This is a single-family/residential course.
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Seat time approximately 30 minutes.
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