Which of the following best captures the scope of the conclusive presumption of compliance within QM standards?

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Multiple Choice

Which of the following best captures the scope of the conclusive presumption of compliance within QM standards?

The conclusive presumption of compliance is a safe-harbor concept: if a loan qualifies as a general QM, the lender is conclusively presumed to meet the ability-to-repay requirements. This presumption specifically applies to prime loans that meet the general QM standards—those features like no risky payment structures (no negative amortization, no interest-only or balloon payments), and caps on points and fees (typically around 3%), often with a 43% debt-to-income limit. When a loan fits these general QM criteria, it enjoys this conclusive protection from ATR-related challenges. It doesn’t apply to every mortgage or to non-prime or non-general-QM loans, and it isn’t limited to conventional products alone.

The conclusive presumption of compliance is a safe-harbor concept: if a loan qualifies as a general QM, the lender is conclusively presumed to meet the ability-to-repay requirements. This presumption specifically applies to prime loans that meet the general QM standards—those features like no risky payment structures (no negative amortization, no interest-only or balloon payments), and caps on points and fees (typically around 3%), often with a 43% debt-to-income limit. When a loan fits these general QM criteria, it enjoys this conclusive protection from ATR-related challenges. It doesn’t apply to every mortgage or to non-prime or non-general-QM loans, and it isn’t limited to conventional products alone.

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