California QM Practice Exam

A lender can indeed sell a Qualified Mortgage (QM) loan in the secondary market, which enhances liquidity. QMs are designed to meet certain standards set forth by the Consumer Financial Protection Bureau (CFPB) and are viewed favorably by investors in the secondary market. By adhering to these standards, lenders not only make loans that are more likely to be successfully repaid but also create loans that are attractive for sale, thus increasing the lender's liquidity and ability to fund more loans.

The ability to sell QM loans is crucial for lenders as it allows them to free up capital and better manage their resources. This characteristic of QM loans contrasts with non-QM loans, which may be more difficult to sell because they do not meet the same set of criteria, potentially resulting in a higher risk for investors. Therefore, the option indicating that selling QM loans enhances liquidity accurately reflects the purpose and benefit of QM loans in the mortgage market.