General Mortgage Knowledge · 20% of the SAFE exameasy
Correct answer: Safe harbor — a conclusive presumption of compliance with the ATR requirement
Under Regulation Z, a QM loan that is not a higher-priced covered transaction (i.e., the APR does not exceed the APOR by 1.5 percentage points or more for a first-lien loan) receives safe harbor protection — meaning it conclusively satisfies the ATR requirement and borrowers cannot successfully challenge the lender's compliance. "Rebuttable presumption — the borrower can prove the..." overstates the protection (lenders can still be sued, but the ATR compliance is conclusively presumed). "Safe harbor — a conclusive presumption of compliance..." describes the rebuttable presumption standard, which applies to higher-priced QMs. "Conditional protection — only if the borrower made a..." is fictitious — no 12-month payment history condition exists in the QM framework.
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