Finance
The Dodd-Frank Act's Ability-to-Repay (ATR) rule requires mortgage lenders to:
AGuarantee a borrower's ability to repay by insuring the loan
BVerify and document the borrower's financial ability to repay the mortgage before making the loan✓ Correct
CLimit mortgage interest rates to 6%
DOnly lend to borrowers with credit scores above 700
Explanation
The Ability-to-Repay rule (part of Dodd-Frank) requires lenders to make a good-faith determination that borrowers can repay the loan. Lenders must verify income, assets, employment, credit history, and monthly debt obligations.
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