A non-qualified mortgage was defined as such by Dodd-Frank when that legislation was passed. Subprime loans absolutely wrecked Fannie, Freddie, and Ginnie and everything that was going on. And Fannie and Freddie used to buy loans that were considered subprime. So in part of Dodd-Frank, what they did is they define what is a qualified mortgage versus a non-qualified mortgage.

A non-qualified mortgage has certain characteristics like possibly interest-only, maybe has a balloon payment, doesn't meet Fannie Freddie guidelines, for example, you could have a foreclosure today and buy a home tomorrow and you could do a non-qualified mortgage.

The secondary market is cold, heartless and unforgiving. Don't ever forget that. And you're seeing it right now, the non-QM market. #KPTalks