Finance
Under the Dodd-Frank Wall Street Reform Act, lenders must verify a borrower's ability to repay a mortgage. This requirement is known as the:
AAnti-Predatory Lending Rule
BAbility-to-Repay (ATR) Rule✓ Correct
CCommunity Reinvestment Rule
DQualified Mortgage Safe Harbor Rule
Explanation
The Ability-to-Repay (ATR) Rule requires lenders to make a reasonable, good-faith determination that the borrower can repay the loan before extending credit. The Qualified Mortgage (QM) provision provides lenders a safe harbor from ATR liability.
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