What is the primary focus of the ability-to-repay rule?

The primary focus of the ability-to-repay rule is to ensure that borrowers can repay their loans. This regulation was established to protect consumers from taking on debt that they cannot afford, thereby reducing the risk of foreclosure and financial hardship. By requiring lenders to assess a borrower's ability to repay, the rule aims to promote responsible lending practices and ensure that borrowers are not granted loans that exceed their financial capacity. This emphasizes the importance of evaluating factors such as income, employment status, credit history, and other financial obligations before extending credit. The ultimate goal is to create a safer lending environment for both borrowers and lenders, promoting long-term stability in the housing market.