A lender originates a mortgage that meets all QM requirements. Three years later, the borrower defaults and claims the lender violated the ATR rule. What legal protection does the lender have?
Correct Answer
C) A rebuttable presumption that the ATR rule was satisfied
Under 12 CFR 1026.43(e)(1), QM loans receive a rebuttable presumption of compliance with the ATR rule. This means the lender is presumed to have met ATR requirements, but the presumption can be overcome with evidence to the contrary.
Why This Is the Correct Answer
Under 12 CFR 1026.43(e)(1), QM loans receive a rebuttable presumption of compliance with the ATR rule. This means the lender is presumed to have met ATR requirements, but the presumption can be overcome with evidence to the contrary.
More Federal Laws Questions
A mortgage broker's website states 'Qualified borrowers can get loans with down payments as low as 3%.' Which statement about TILA advertising requirements is correct?
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?
Which information is NOT required to be included in an AfBA disclosure?
For a closed-end mortgage loan, when must the creditor provide the Closing Disclosure to the borrower?
For a purchase money mortgage with a loan amount of $400,000, which of the following represents the correct method for calculating the APR?
Which of the following fees would NOT be included in the finance charge calculation under TILA?
A servicer receives a borrower's written request for payoff information on Monday. The borrower needs the information for a refinance closing scheduled for the following Friday. When must the servicer provide an accurate payoff statement?
Which of the following documents must be provided to trigger the start of the 3-day rescission period?
A borrower refinances their primary residence on Tuesday and receives the required TILA disclosures. Assuming no federal holidays, what is the last day they can exercise their right of rescission?
A borrower's mortgage payment includes principal, interest, taxes, insurance, and a monthly HOA fee collected by the lender. Which components are included in the finance charge calculation?
People Also Study
General Mortgage Knowledge
20% of exam
Mortgage Loan Origination Activities
27% of exam
Ethics, Fraud & Consumer Protection
18% of exam
Uniform State Test Content
11% of exam
Related Study Resources
Previous Question
A mortgage company's billboard displays 'Refinance and save! Payments starting at $999 per month on loans up to $200,000.' What makes this advertisement non-compliant with TILA?
Next Question
A borrower's homeowners insurance premium increases by $300 annually after the Closing Disclosure was issued, discovered during the final insurance verification. This change affects the monthly payment by $25. What action is required?