Chapter 2: Nontraditional Mortgage Products Overview Quiz

Question 1

In which federal law would you find the definition of a NonTraditional Loan?

Answer 1

Safe Act

Question 2

Covers more than one parcel or lot

Answer 2

blanket mortgage

Question 3

Lower than the normal interest rate

Answer 3

teaser rate

Question 4

toxic feature

Answer 4

interest only payments

Question 5

can be borrowed against and paid off as needed, and has an interest only minimum monthly payment

Answer 5

HELOC

Question 6

right to change from an adjustable rate mortgage to a fixed rate mortgage one time

Answer 6

convertible ARM

Question 7

A conforming loan

Answer 7

follows the secondary market criteria set by Fannie Mae/Freddie Mac

Question 8

nontraditional mortgage are LEAST risky for borrowers

Answer 8

low debt to income ratios

Question 9

Borrower Stan is considering a simultaneous second loan. Each of these are risk mitigating factors that might help him get this loan EXCEPT

Answer 9

high credit score

Question 10

NOT eligible for an HECM loan

Answer 10

cooperative

Question 11

NOT taken into consideration when determining the mortgage amount for an HECM?

Answer 11

credit history of the borrower