Which of the following statements is most consistent with the concept of a presumption of compliance in qualified mortgages?

• A. The loan is exempt from any risk to the lender
• B. The borrower automatically qualifies based on collateral value alone
• C. The loan terms are tailored to non-traditional underwrite
• D. The loan is presumed to comply with ability-to-repay standards

Answer: (D)

Presumption of compliance means that when a loan qualifies as a Qualified Mortgage, it is assumed to meet the borrower’s ability-to-repay requirements, giving the lender a safe harbor from ATR liability. That is why the statement that the loan is presumed to comply with ability-to-repay standards is the best fit. It reflects the purpose of QM: once a loan meets the criteria, it’s treated as having satisfied ATR.

The other options don’t fit. A QM isn’t a blanket exemption from risk for lenders. ATR is still a consideration, and other issues can arise. Relying on collateral value alone does not satisfy ability-to-repay requirements. And underwriting that’s non-traditional or outside QM-safe practices isn’t consistent with the presumption that a QM complies with ATR.