Finance
Under the Dodd-Frank Act, a 'Qualified Mortgage' (QM) is significant because it:
AIs guaranteed by the federal government
BProvides the lender with a presumption that the borrower had the ability to repay the loan✓ Correct
CRequires no down payment from the borrower
DEliminates all closing costs for the borrower
Explanation
A Qualified Mortgage is a standardized loan type that meets specific ability-to-repay requirements under the Dodd-Frank Act. QMs are presumed to comply with the ability-to-repay rule, providing lenders with legal protection from borrower lawsuits claiming they were given an unaffordable loan.
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