Qualified Mortgage

A qualified mortgage (QM) is a mortgage loan that meets certain requirements set by the Consumer Financial Protection Bureau (CFPB). These requirements are designed to protect consumers from predatory lending practices and ensure that they are able to afford their mortgages.

To qualify as a QM, a mortgage loan must meet all of the following criteria:

* The loan must have a fixed interest rate.
* The loan term must be no longer than 30 years.
* The loan-to-value ratio (LTV) must be no greater than 80%.
* The borrower must have a credit score of at least 620.
* The borrower must be able to document their income and assets.

If a mortgage loan does not meet all of these criteria, it is considered to be a non-QM loan. Non-QM loans are not subject to the same protections as QM loans, and borrowers who take out these loans may be at greater risk of default.

The CFPB created the QM rule in an effort to protect consumers from predatory lending practices. The rule is designed to ensure that borrowers are able to afford their mortgages and that they are not taken advantage of by lenders.

The QM rule has been controversial since it was first proposed. Some lenders argue that the rule is too restrictive and that it makes it difficult for borrowers to qualify for mortgages. Others argue that the rule is necessary to protect consumers from predatory lending.

The CFPB has defended the QM rule, arguing that it is necessary to protect consumers from harm. The agency has said that the rule has not had a significant impact on the availability of mortgages, and that it has helped to protect consumers from predatory lending.

The QM rule is an important consumer protection measure. It helps to ensure that borrowers are able to afford their mortgages and that they are not taken advantage of by lenders. The rule has been controversial, but it is an important step in protecting consumers from predatory lending.