Conclusive presumption applies to which category of mortgages?

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

Answer: (D)

Conclusive presumption is a strong, binding assumption used in mortgage regulation to indicate that a loan clearly meets underwriting standards for ability to repay. Prime mortgages are the standard, lower‑risk category, with solid borrower credit, verifiable income, and straightforward, fully amortizing terms. When a loan fits these prime criteria, regulators and courts treat the lender as conclusively presumed to have met the ability‑to‑repay requirements, providing a safe harbor in certain disputes. The other categories—subprime, adjustable-rate, and interest-only—carry higher risk features or payment variability, so they don’t receive that conclusive presumption and require closer scrutiny or evidence of compliance with underwriting standards.