The CFPB defines a Qualified Mortgage (QM) as a mortgage that, among other things:
does not exceed 30 years;
for a loan of $100,000 or more, limits points and fees to 3 percent of the total loan amount; and
has a debt-to-income ratio no higher than 43 percent.
Under the CFPB’s rule, a QM that has an interest rate that does not exceed the Average Prime Offer Rate (APOR) for mortgages of similar lengths is given complete protection against legal actions and defenses. A QM mortgage that has an interest rate that does exceed the comparable APOR for similar mortgage loans by 1.5% is considered a higher priced mortgage and is given a presumption that it was properly underwritten. This means that a homeowner must prove, for example, that the loan was made without regard to his or her ability to repay the loan if he or she defaults on the loan.
A mortgage guaranteed or insured by HUD could qualify as a QM mortgage even if it exceeds a 43% debt-to-income (D-T-I) ratio. Which of the following statements do you agree with? (Please choose one.)