Other

Question 1

4 ways to pay ARM

Answer 1

1. 30 yr payment
   2 15yr payment
2. interest only
3. negative payment

Question 2

Which of the following is a risk associated with a nontraditional ARM?
a.) the inclusion of a prepayment penalty
b.) payment shock when amortizing begins
c.) additional costs associated with reduced document loans
d.) all of the above

Answer 2

D.

Question 3

Under The Guidance on Subprime Mortgage Loans, the CSBS considers all of the following to be
a predatory lending practice except:
a.) Basing a loan off the foreclosure value
b.) Refinancing a borrower repeatedly to collect more fees
c.) Charging higher rates to risky buyers
65
d.) Using fraud or deception to sell the loan

Answer 3

C.

Question 4

What is payment shock

Answer 4

When payments on nontraditional loans increase significantly

Question 5

What is risk layering?

Answer 5

relaxing more then one of the traditional UW standards