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Question 1 of 8

1. Question
A lender evaluates a borrower applying for an adjustable-rate mortgage with a low introductory teaser rate.

Which payment calculation standard applies?
- A) The lender may always use the teaser rate for qualification purposes
- B) The lender must use the introductory or fully-indexed rate, whichever is lower
- C) The lender must use the introductory or fully-indexed rate, whichever is higher, and calculate substantially equal fully amortizing payments
- D) The lender may qualify the borrower using interest-only payments regardless of loan terms
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Question 2 of 8

2. Question
A borrower applies for a first mortgage while simultaneously obtaining a second mortgage secured by the same property.

What must the lender include in the ATR/QM analysis?
- A) Only the monthly payment for the first mortgage
- B) Only debts appearing on the borrower’s credit report
- C) Monthly payments on any simultaneous loans secured by the same property
- D) Simultaneous loans only if they are adjustable-rate mortgages
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Question 3 of 8

3. Question
A lender calculates a borrower’s ability-to-repay for a mortgage transaction but excludes anticipated property taxes, homeowners insurance, and homeowners association dues from the analysis.

Why could this violate ATR/QM underwriting requirements?
- A) Property-related obligations such as taxes, insurance, and HOA fees must be considered in the borrower’s monthly obligations
- B) HOA dues are considered optional expenses
- C) Property taxes are excluded if escrowed
- D) Insurance premiums are considered only for FHA loans
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Question 4 of 8

4. Question
During underwriting, a lender reviews a borrower’s income but ignores existing child support obligations and outstanding consumer debts.

Why could this underwriting approach violate ATR/QM requirements?
- A) Child support obligations are excluded from ATR calculations
- B) Consumer debts, alimony, and child support obligations must be considered under the ATR/QM Rule
- C) Existing debts are considered only for conventional loans
- D) Non-mortgage obligations are reviewed only after closing
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Question 5 of 8

5. Question
A lender calculates a borrower’s debt-to-income ratio by comparing total mortgage and non-mortgage obligations against the borrower’s gross monthly income.

Under the ATR/QM Rule, what is this calculation intended to measure?
- A) The borrower’s future property appreciation potential
- B) The borrower’s residual home equity
- C) The borrower’s monthly debt-to-income ratio or residual income
- D) The borrower’s future refinancing eligibility
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Question 6 of 8

6. Question
A lender approves a mortgage loan with a 52 percent debt-to-income ratio and later faces questions regarding Qualified Mortgage eligibility standards.

What DTI threshold is typically associated with ATR/QM compliance?
- A) 28 percent
- B) 36 percent
- C) 43 percent
- D) 50 percent
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Question 7 of 8

7. Question
A borrower defaults on a mortgage loan and later proves in court that the lender failed to follow prudent ATR underwriting standards when originating the loan.

What potential liability could the lender face?
- A) Only repayment of appraisal fees
- B) Up to three years of finance charges and fees paid by the consumer, along with the consumer’s legal fees
- C) Automatic cancellation of the mortgage note only
- D) Liability limited solely to state licensing penalties
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Question 8 of 8

8. Question
A lender evaluates a borrower’s repayment history, including past late payments, collection accounts, and prior mortgage performance, before approving a mortgage loan under the ATR/QM Rule.

Which ATR/QM underwriting factor is the lender evaluating?
- A) Residual income
- B) Simultaneous lien exposure
- C) Credit history
- D) Escrow account balances
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