Non-Qualified Mortgages 101
Following the biggest economic crisis of the 21st century, federal and state regulators tightened the laws around mortgage lending. In response to a crash that largely due to activities in subprime lending, the government introduced the Ability to Repay rule. In short, this rule sets strict criteria outlining who is likely to repay a mortgage successfully. Those individuals then qualify for a loan called a qualified mortgage (QM).