Finance
What is the 'ability to repay' (ATR) rule and how does it protect Nevada mortgage borrowers?
AA state law requiring Nevada lenders to verify borrower income
BA federal rule under Dodd-Frank requiring lenders to make a reasonable, good-faith determination that the borrower has the ability to repay the loan before originating it✓ Correct
CA rule requiring all Nevada borrowers to have a 20% down payment
DA rule limiting the maximum debt-to-income ratio to 28%
Explanation
The ATR rule (implemented by the Consumer Financial Protection Bureau under Dodd-Frank) requires lenders to verify and document that borrowers have the ability to repay the mortgage. Lenders must consider income, assets, employment, debts, and other factors. Loans meeting ATR standards may be 'Qualified Mortgages.'
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