What is the scope of the conclusive presumption of compliance qualification?

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Multiple Choice

What is the scope of the conclusive presumption of compliance qualification?

The concept here is a bright-line safe harbor for lenders under the Ability-to-Repay/Qualified Mortgage framework. When a loan is a general Qualified Mortgage that meets the standard criteria, there is a conclusive presumption that the lender complied with the ability-to-repay requirement. That conclusive presumption applies to prime loans that meet the general QM standards. In practical terms, if a loan is considered a general QM and it satisfies the required features (no risky loan features such as negative amortization, interest-only or balloon payments; points and fees within the permitted threshold; a 30-year or shorter term; and other general QM caps like the DTI limit), the lender is conclusively presumed to have complied with ATR. This provides a strong protection for the lender. The other options don’t fit because the scope isn’t all loan types, nor is it limited to wholesale loans, nor is it restricted to non-prime loans. Only prime loans that meet the general QM standards carry that conclusive presumption.

The concept here is a bright-line safe harbor for lenders under the Ability-to-Repay/Qualified Mortgage framework. When a loan is a general Qualified Mortgage that meets the standard criteria, there is a conclusive presumption that the lender complied with the ability-to-repay requirement.

That conclusive presumption applies to prime loans that meet the general QM standards. In practical terms, if a loan is considered a general QM and it satisfies the required features (no risky loan features such as negative amortization, interest-only or balloon payments; points and fees within the permitted threshold; a 30-year or shorter term; and other general QM caps like the DTI limit), the lender is conclusively presumed to have complied with ATR. This provides a strong protection for the lender.

The other options don’t fit because the scope isn’t all loan types, nor is it limited to wholesale loans, nor is it restricted to non-prime loans. Only prime loans that meet the general QM standards carry that conclusive presumption.

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