Since 2014, home loans in the US have fallen into two categories: qualifying (QM) and non-qualifying (non-QM).
The Consumer Financial Protection Bureau (CFPB) introduced the concept of the former as part of the Home Mortgage Disclosure Act, which was designed to reduce risky practices in the market. The QM designation involved a variety of metrics, most notably a debt-to-income ratio of less than 43%.
The Act inevitably spawned the non-QM mortgage sector, targeted at those that fall outside those strict QM specifications.
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