Which of the following would NOT be a characteristic of a Qualified Mortgage?

A characteristic of a Qualified Mortgage is that it is designed to protect borrowers by assuring that they can repay the loan. When considering the options, allowing negative amortization contradicts the fundamental principles of a Qualified Mortgage, which emphasizes the borrower's ability to pay and the loan's structure.

Negative amortization occurs when the loan balance increases because the payments made do not cover the interest due. This practice can lead to a cycle of increased debt, which is contrary to the responsible lending criteria set forth by the Consumer Financial Protection Bureau (CFPB) for Qualified Mortgages.

The other characteristics, such as not having excessive points or fees, verifying the borrower's ability to repay the loan, and allowing for both fixed or adjustable interest rates, are inherent to Qualified Mortgages. They ensure that the mortgage terms are fair and that the borrower has a solid chance of meeting their payment obligations without falling into financial distress. Thus, the presence of all these characteristics, except for negative amortization, defines a Qualified Mortgage.