Ability-to-Repay
Amongst other changes, the Dodd-Frank Act amended Regulation Z, which implemented the Truth-in-Lending Act (TILA). These changes prohibit lenders from providing mortgage loans without first assessing the borrower's ability-to-repay (ATR). As a result, the Consumer Financial Protection Bureau (CFPB) published a final rule outlining eight key underwriting factors that lenders must take into consideration prior to issuing credit.
#4
#2
#1
#3
Monthly payment on any simultaneous loan
Current employment status
Current or reasonably expected income or assets
Monthly payment on the covered transaction
#5
#7
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#8
Monthly payment for mortgage-related obligations
Monthly debt-to-income ratio or residual income
Current debt obligations, alimony, and child support
Credit history
Ability-to-Repay
LCE
Created on February 27, 2024
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Transcript
Ability-to-Repay
Amongst other changes, the Dodd-Frank Act amended Regulation Z, which implemented the Truth-in-Lending Act (TILA). These changes prohibit lenders from providing mortgage loans without first assessing the borrower's ability-to-repay (ATR). As a result, the Consumer Financial Protection Bureau (CFPB) published a final rule outlining eight key underwriting factors that lenders must take into consideration prior to issuing credit.
#4
#2
#1
#3
Monthly payment on any simultaneous loan
Current employment status
Current or reasonably expected income or assets
Monthly payment on the covered transaction
#5
#7
#6
#8
Monthly payment for mortgage-related obligations
Monthly debt-to-income ratio or residual income
Current debt obligations, alimony, and child support
Credit history