Finance
When evaluating a borrower's creditworthiness under the federal Ability to Repay rule (ATR), lenders must consider:
AOnly the borrower's credit score
BIncome, assets, employment status, credit history, monthly mortgage payment, and all regular debt obligations✓ Correct
COnly the LTV ratio
DThe property's income potential
Explanation
The Dodd-Frank Act's Ability to Repay rule (implemented through CFPB Regulation Z) requires lenders to make a reasonable, good-faith determination that the borrower can repay the loan. Lenders must consider: current or reasonably expected income or assets, employment status, monthly mortgage payment, monthly payments on simultaneous loans, monthly payments for mortgage-related obligations, current debt obligations, credit history, and DTI ratio.
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