If a borrower doesn’t qualify for a loan under the ATR rule, can we rely on a guarantor’s income?
No, you may not use a guarantor’s income to qualify a loan under the ATR rule. Under the ATR rule, you have to consider the “borrower’s” ability to repay a loan(12 CFR 1026.43), and the guarantor is not considered a borrower under the ATR rules. The creditor can only rely on the borrower’s and any co-borrower’s income and assets to document ATR.
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