For a loan subject to the general ability-to-repay rule, an underwriter considers income or assets, current employment when relied on, the payment on the new loan, simultaneous-loan payments, and mortgage-related obligations. Which three considerations still must be addressed?
Correct Answer
D) Current debt obligations, DTI or residual income, and credit history
D. Current debts, DTI or residual income, and credit history remain to be considered. The stem covers the first five considerations in the general rule. The remaining considerations address existing obligations, the relationship between resources and payments, and past credit behavior. Income or assets is one consideration, not two. Scope and exceptions: This concerns the general ATR rule. Current obligations include applicable alimony and child support. The credit-history provision does not itself prescribe a universal minimum score. Source: 1026.43(c)(2)(i)–(viii); comment 43(c)(2)(viii)-1 — https://www.consumerfinance.gov/rules-policy/regulations/1026/43/
Why This Is the Correct Answer
D. Current debts, DTI or residual income, and credit history remain to be considered. The stem covers the first five considerations in the general rule. The remaining considerations address existing obligations, the relationship between resources and payments, and past credit behavior. Income or assets is one consideration, not two. Scope and exceptions: This concerns the general ATR rule. Current obligations include applicable alimony and child support. The credit-history provision does not itself prescribe a universal minimum score.
Why the Other Options Are Wrong
Option A: Only the credit score; all other considerations are optional
A credit score alone neither completes the omitted factors nor substitutes for them.
Option B: No others: the five considerations already cover all eight
Five listed considerations do not exhaust the eight.
Option C: No others once the new loan payment has been verified
Verifying the new payment does not eliminate the other required considerations.
Exam Tip
Count regulatory categories, not the number of words separated by “or.”
More Federal Laws Questions
Before the team acts on a production meeting, a training manager must address SCRA Interest Rate Cap. Which response is most defensible?
A team member asks about RESPA Kickbacks and Referrals in an investor-delivery review while trying to confirm the rule-based response. Which response should the loan team use?
During a disclosure desk review, the loan team encounters an RESPA Servicing Transfer issue. Which response should avoid a shortcut that would misapply the rule?
A disciplinary-risk review raises a question about TILA APR and finance-charge rules. Which action should the renewal specialist recommend?
An MLO is reviewing procedures for a case where a compliance analyst asks why covered mortgage application data is collected. What is the proper handling?
A consumer complaint response raises a question about GLBA privacy requirements. Which action should the state compliance officer recommend?
Before the team acts on a branch training session, a policy analyst must address RESPA Servicing Transfer Notice. Which response is most defensible?
A training manager is resolving RESPA Referral Fees during an internal audit sample. Which action best fits the rule?
An operations lead is resolving ECOA Prohibited Discrimination Bases during a loan-team coaching session. Which action best fits the rule?
In a file escalation meeting, a disclosure specialist sees facts tied to TILA Closing Disclosure. What should the file reflect?
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 training manager is resolving RESPA Referral Fees during an internal audit sample. Which action best fits the rule?
Next Question
During a disclosure desk review, the loan team encounters a GLBA Privacy Requirements issue. Which response should resolve the issue before the file moves forward?