qualified residential mortgage

(B)The Federal banking agencies, the Commission, the Secretary of Housing and Urban Development, and the Director of the Federal Housing Finance Agency shall jointly define the term “qualified residential mortgage” for purposes of this subsection, taking into consideration underwriting and product features that historical loan performance data indicate result in a lower risk of default, such as— (i)documentation and verification of the financial resources relied upon to qualify the mortgagor; (ii)standards with respect to— (I)the residual income of the mortgagor after all monthly obligations; (II)the ratio of the housing payments of the mortgagor to the monthly income of the mortgagor; (III)the ratio of total monthly installment payments of the mortgagor to the income of the mortgagor; (iii)mitigating the potential for payment shock on adjustable rate mortgages through product features and underwriting standards; (iv)mortgage guarantee insurance or other types of insurance or credit enhancement obtained at the time of origination, to the extent such insurance or credit enhancement reduces the risk of default; and (v)prohibiting or restricting the use of balloon payments, negative amortization, prepayment penalties, interest-only payments, and other features that have been demonstrated to exhibit a higher risk of borrower default.


15 USC § 78o-11(e)(4)(B)

Scoping language

None: Default is title Scope
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