Of the following loans made by a national bank, which loan is NOT covered by the OCC ARM regulation?

A. A loan to purchase a single-family dwelling to be used as a residence, secured by the dwelling with an adjustable interest rate

B. A loan made to purchase a mobile home to be used as a rental property, secured by the home with a variable interest rate

C. A loan made to purchase an eight-unit apartment complex, secured be the building, made payable on demand with a variable rate of interest

d. A loan made to purchase a duplex, secured by the dwelling, amortized over 15 years with a 5-year maturity, at a variable rate of interest

C. A loan made to purchase an eight-unit apartment complex, secured be the building, made payable on demand with a variable rate of interest

Reg D: 12 CFR 34.20

This regulation covers only loans made to purchase a one- to four-family dwelling.  The regulation does not cover loans secured by or for the purchase of multifamily dwellings.

First National Bank is a member of a multibank holding company.  The bank makes ARM loans and occasionally purchases ARM loans from its affiliate national and state banks as well as from nonaffiliate banks.  All of its own ARMs as well as those it purchases are subject to Regulation Z.  Which of the following practices is NOT acceptable under the OCC ARM regulation?

A. The bank purchases loans from its state affiliate banks where the index on the loan is tied to First National Bank's prime rate

B. The bank makes loans to purchase single-family dwellings with interest rates that may be adjusted from time to time

C. The bank links the interest rate indices on its own ARM loans to the national prime rate as published in The Wall Street Journal

D. The bank requires its national bank affiliates to use the national prime rate as published in The Wall Street Journal as the index for any of the ARM loans it purchases

A. The bank purchases loans from its state affiliate banks where the index on the loan is tied to First National Bank's prime rate

Reg D: 12 CFR 34.21

The OCC ARM regulation requires that index used on an ARM loan not be linked to a rate within the control of the bank.  The regulation also requires loans purchased by a national bank from an affiliate or a subsidiary comply with the ARM regulation.

On which of the following adjustable-rate loans must the bank use an index beyond its control?

A. A loan to purchase a home to refurbish and resell for a profit

B. A loan to purchase a vacation home

C. A loan to purchase a duplex where the borrower will live in one of the units

D. A loan to purchase a home to be used as a rental property

C. A loan to purchase a duplex where the borrower will live in one of the units

Reg D: 12 CFR 34.22

Only a loan secured by the borrower's principal residence qualifies for the protection of the ARM regulation that prevents the financial institution fro using an index within its control.  Other loans, even if they are for a consumer purpose, are not covered by the rule.

Under which circumstance would a creditor be allowed to refuse to renew an alternative mortgage parity transaction?

A. The borrower made a late payment twice during the first five years of the transaction

B. The borrower refused to keep the house insured for hazards

C. The information from the borrower's past employment history was incorrect by one month

D. The borrower has asked for interest rate relief

B. The borrower refused to keep the house insured for hazards

Reg D: 12 CFR 1004.4

The other choices are not material.