Finance
What is 'points and fees' in the context of the qualified mortgage (QM) rule and how does it affect Rhode Island lenders?
APoints and fees are always prohibited
BThe QM rule limits total points and fees on qualified mortgages to 3% of the loan amount to prevent excessive costs to borrowers✓ Correct
CThe QM rule requires a minimum of 2 points on all mortgages
DPoints and fees are unlimited under the QM rule
Explanation
Under the Qualified Mortgage (QM) rule (CFPB), total points and fees on a QM loan are capped at 3% of the total loan amount (with some exceptions for smaller loans) to protect borrowers from excessive costs.
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