Finance
Under the Dodd-Frank Act, a 'Qualified Mortgage' (QM) provides lenders with protection from ability-to-repay liability because it:
AHas a government guarantee
BMeets specific underwriting standards including a maximum 43% DTI and prohibitions on risky loan features✓ Correct
CIs automatically eligible for Fannie Mae purchase
DRequires no PMI
Explanation
A Qualified Mortgage (QM) meets ATR standards with additional requirements: maximum DTI of 43% (with some exceptions), no negative amortization, no interest-only, no balloon payments (in most cases), and limits on points and fees.
Related Massachusetts Finance Questions
- A Massachusetts USDA Rural Development loan is available for properties located:
- A 'bridge loan' in Massachusetts real estate is used to:
- In Massachusetts, a 'negative amortization' loan is one where:
- A Massachusetts condominium association assessment that goes unpaid becomes a lien that:
- A Massachusetts borrower's front-end debt-to-income (DTI) ratio compares:
- A Massachusetts buyer uses a 'bridge loan' to purchase a new home before selling their current home. A bridge loan is:
- The 'loan-to-value ratio' (LTV) is calculated as:
- A Massachusetts lender requires a 'personal financial statement' from a commercial borrower. This document shows the borrower's:
Practice More Massachusetts Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Massachusetts Quiz →