Mortgage Lending: 9.11.4 Dodd-Frank Act Definition of “Qualified” Mortgage
The Dodd-Frank Act includes a definition of “qualified” mortgages for which there is a presumption that the borrower meets the law’s requirements regarding repayment ability. A “qualified” mortgage may not include a balloon payment and must meet other requirements.556 Notwithstanding the statute, the CFPB regulations permit a qualified mortgage to contain a balloon payment in certain limited circumstances.557