What is QM ruling (Qualified Mortgage)?

What is QM ruling (Qualified Mortgage)?

The rule took effect on January 10, 2014. It is intended to create a class of “safer” mortgages. It does this by (A) restricting certain loan features, (B) capping mortgage points and fees, and (C) imposing certain underwriting requirements for loans. In exchange for generating QM loans, lenders will be given some degree of legal protection from consumer lawsuits, either in the form of a safe harbor or a rebuttable presumption.