Rebuttable Presumption (Qualified Mortgage)

Updated 2026-05-17

Rebuttable Presumption refers to a legal presumption that a loan complies with the 12 CFR 1026 43 Refinancing Non Standard Mortgages (ATR) requirements under Truth in Lending Act (TILA) and Regulation Z (12 CFR 1026.43), but which can be challenged by the consumer. This is a form of legal protection for 12 CFR 1026 43 Refinancing Non Standard Mortgagess (QMs) that is less absolute than a 12 CFR 1026 43 Refinancing Non Standard Mortgages.

Conditions for Rebuttable Presumption

A loan receives a rebuttable presumption of compliance if it meets the definition of a 12 CFR 1026 43 Refinancing Non Standard Mortgages and is also a Rural Area Definition and Special Provisions for Small Creditors (Regulation Z) (HPML).

Effect of Rebuttable Presumption

If a loan has a rebuttable presumption, the consumer can attempt to prove that the creditor did not make a reasonable and good faith determination of their ability to repay, even though the loan is a QM. To rebut the presumption, the consumer must demonstrate that, at the time the loan was consummated, they did not have sufficient residual income or assets to meet their living expenses after accounting for the mortgage payment and other debt obligations.

Distinction from Safe Harbor

The rebuttable presumption offers a lesser degree of protection for creditors compared to a 12 CFR 1026 43 Refinancing Non Standard Mortgages. While a safe harbor conclusively presumes ATR compliance, a rebuttable presumption allows for a consumer challenge, reflecting the regulatory view that higher-priced loans warrant a slightly lower level of conclusive protection for creditors.