A conclusive presumption of compliance applies to:

• A. Subprime mortgages
• B. Jumbo mortgages
• C. Prime mortgages
• D. Adjustable-rate mortgages

Answer: (C)

The idea being tested is how lenders can be protected from ATR challenges through the Qualified Mortgage framework. A conclusive presumption of compliance means that if a loan meets QM criteria, the lender is deemed to have complied with the ability-to-repay rule—providing a safe harbor. Qualified Mortgages are the loans most likely to carry this conclusive presumption, and they are designed to meet stricter underwriting and terms than other loan types. Prime mortgages are the category that typically aligns with QM standards, making them the class that earns this conclusive protection. Subprime and jumbo loans generally don’t meet QM requirements, and adjustable-rate loans can be QM only if they adhere to the specific QM rules; they aren’t automatically granted the conclusive presumption.