SU # 49__Predatory Lending and Mortgage Fraud Flashcards
The essence of mortgage fraud is _________.
charging loan applicants for services that are not performed.
misstating, misrepresenting, or omitting information that is relied on in an mortgage loan underwriting decision.
convincing consumers to use particular lenders and loan service providers.
giving false information about closing costs to loan applicants.
misstating, misrepresenting, or omitting information that is relied on in an mortgage loan underwriting decision.
A buyer borrows $20,000 from his mother to make a downpayment. This loan must be repaid within five years, but the buyer tells the mortgage lender it is a gift. Has any fraud been committed?
Yes, there is a “silent mortgage.”
Yes, it is loan fraud.
Yes, it is a cash-back scheme.
No, as long as the mortgage loan is senior.
Yes, it is loan fraud.
Which of the following is NOT considered a predatory lending practice?
Failing to provide RESPA documents.
Issuing an unaffordable loan based solely on the applicant’s assets.
Adding unnecessary charges and products to the loan amount.
Charging low origination fees to encourage loan applications.
Charging low origination fees to encourage loan applications.
Loans designed for persons with blemished credit histories and that carry a higher rate of interest than prime loans to compensate for increased credit risk are called
subprime loans
secondary mortgage market loans
predatory loans
conventional loans
subprime loans
What is the practice of “loan flipping?”
Misinforming a loan applicant about the origination costs of competing loan venders.
Inducing a borrower to refinance a mortgage loan repeatedly with no benefit to the borrower.
Issuing a negatively-amortized loan to an ignorant consumer.
Convincing a loan applicant to take a subprime loan when the applicant is actually qualified for a prime loan.
Inducing a borrower to refinance a mortgage loan repeatedly with no benefit to the borrower.
