What is the purpose of the points and fees cap in a Qualified Mortgage?

The points and fees cap in a Qualified Mortgage (QM) is designed to limit the costs associated with obtaining a mortgage, ensuring that borrowers are not subjected to excessive fees that could make borrowing financially burdensome. This consumer protection measure is crucial because it helps maintain affordable access to credit, enhancing the overall integrity of the mortgage market. By capping these costs, the regulation aims to foster responsible lending practices and reduce the risk of borrowers falling into financial distress due to overwhelming loan-related expenses. This aligns with the broader goal of preventing predatory lending practices and promoting fairness in housing finance.