A creditor discovers 45 days after closing that they failed to verify the borrower's employment as required under ATR rules, though the borrower was actually employed as stated. What is the potential liability?
Correct Answer
B) ATR violation regardless of the borrower's actual employment status
Under 12 CFR 1026.43(c)(2), creditors must make a reasonable and good faith determination of repayment ability based on verified information. Failure to verify employment as required constitutes an ATR violation regardless of whether the information was accurate, as the violation is in the process, not the outcome.
Why This Is the Correct Answer
Under 12 CFR 1026.43(c)(2), creditors must make a reasonable and good faith determination of repayment ability based on verified information. Failure to verify employment as required constitutes an ATR violation regardless of whether the information was accurate, as the violation is in the process, not the outcome.
More Federal Laws Questions
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A loan's APR increases from 4.25% on the Loan Estimate to 4.35% on the Closing Disclosure due to a rate lock expiration. What action is required?
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