What is the role of points and fees in determining QM status?

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Multiple Choice

What is the role of points and fees in determining QM status?

Points and fees are part of the test for a Qualified Mortgage because the rules set a 3% cap on these costs for a loan to qualify. The total points and fees charged to the borrower at closing are compared to the loan amount, and if they are 3% or less, the loan can be treated as a QM, benefiting the lender with safe harbor from certain ATR liabilities. This means points and fees directly affect QM eligibility, not the interest rate and not just disclosure. If the costs exceed 3%, the loan would not meet QM status under the general rule.

Points and fees are part of the test for a Qualified Mortgage because the rules set a 3% cap on these costs for a loan to qualify. The total points and fees charged to the borrower at closing are compared to the loan amount, and if they are 3% or less, the loan can be treated as a QM, benefiting the lender with safe harbor from certain ATR liabilities. This means points and fees directly affect QM eligibility, not the interest rate and not just disclosure. If the costs exceed 3%, the loan would not meet QM status under the general rule.

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