General ATR Rule and DTI Policy

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    We are a large bank using the general ATR rule only, and therefore use a DTI % set by our policy. Is it permissible for a borrower to exceed DTI policy and the bank still originate the loan provided we go through policy required steps of certain amount of lending authority or committee approval.

    Would there be any tolerance level or limitations, or factors we need to consider or be cautioned about regarding going over DTI? We have had several lately, more than in the past, that has me thinking about it. Thank you.


    There is no limit on DTI under the genearl ATR rules. You can go by your policy and even have an exception to your policy. If you are having and approving many exceptions to your DTI policy limit then you might consider raising your limit. I would recommend using the 43% as a watermark, so if you are below that you could consider raising to your comfort level. It can also be higher than 43%, but I would be hesitant to make it much higher.

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