How does the Quality Mortgage process affect buyers in NYC?

[scotty]

I keep hearing about this Quality Mortgage (QM) process from mortgage bankers and brokers here in NYC. What does this have to do with me?

Does qualifying for a Quality Mortgage give me a better rate?

What do home buyers in NYC need to know about Quality Mortgages?

[taia]

I've had a mortgage banker pitch this to me before. Basically there's no more NINJA loans, where teachers say they make $1 million a year and banks just believe them. Now banks have to go through this Quality Mortgage process which basically means they have to actually analyze whether a borrower can afford a loan before granting it. And yes, they even do this for refinancings.

I believe to be a Quality Mortgage, the Debt to Income (DTI) ratio has to be 43% or less. Curious, does anyone know what the penalties are for banks if their loan isn't a Quality Mortgage?

My guess is that they simply can't sell it to Fannie or Freddie if it isn't a Quality Mortgage, and have to hold it on their books?