Qualified mortgages are beneficial because they come with a presumption of compliance regarding the borrower's ability to repay standards.

• A. They come with a presumption of compliance that the borrower meets ability to repay standards
• B. They require higher down payments
• C. They eliminate the need for disclosures
• D. They allow lenders to charge higher fees

Answer: (A)

Qualified mortgages provide a safe harbor that the lender has complied with the ability-to-repay requirements. When a loan meets QM criteria, it’s presumed that the borrower’s ability to repay was reasonably assessed according to the rules. This presumption protects lenders from certain challenges or liability if the loan later proves to be a tough deal for the borrower, as long as the loan stays within QM guidelines. That protective presumption is the central benefit of a QM.

Higher down payments, fewer disclosures, or the ability to charge higher fees are not the defining advantage of QM. The key point is the presumption of ATR compliance that QM status affords.