A New York high-cost borrower in 2026 has total monthly debts at 48% of gross monthly income. Assuming the VA residual-income test is also met, what presumption does this debt-to-income ratio support?
Correct Answer
D) A rebuttable presumption of due regard, with the VA residual test met
A lender benefits from a rebuttable presumption that the loan was made with due regard to repayment ability if it demonstrates that at consummation the resident borrowers total monthly debts, including amounts owed under the loan, do not exceed fifty percent of monthly gross income, and the lender follows the residual income guidelines in 38 C.F.R. § 36.4337(e) and VA Form 26-6393. Other choices: the presumption is rebuttable; the figure is 50 percent rather than 43; and a ratio is set. Source: N.Y. Banking Law § 6-l(2)(k)
Why This Is the Correct Answer
A lender benefits from a rebuttable presumption that the loan was made with due regard to repayment ability if it demonstrates that at consummation the resident borrowers total monthly debts, including amounts owed under the loan, do not exceed fifty percent of monthly gross income, and the lender follows the residual income guidelines in 38 C.F.R. § 36.4337(e) and VA Form 26-6393. Other choices: the presumption is rebuttable; the figure is 50 percent rather than 43; and a ratio is set. Source: N.Y. Banking Law § 6-l(2)(k)
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