In Guidance on Nontraditional Mortgage Product Risks, if the institution has a concentration in a nontraditional mortgage portfolio, the institution should:
A.
Have well-developed monitoring systems and risk management practices
B.
Monitor by originator and key borrower and portfolio characteristics
C.
Not understand the risk of payment shock and negative amortization
If an institution has a concentration in nontraditional mortgage products, it should have well-developed monitoring systems and risk management practices (option A) and also monitor by originator and key borrower and portfolio characteristics (option B) to effectively manage and mitigate the risks associated with these products. Understanding the risks of payment shock and negative amortization is crucial, making option C incorrect because institutions should indeed understand these risks, not disregard them.
upvoted 1 times
...
Log in to ExamTopics
Sign in:
Community vote distribution
A (35%)
C (25%)
B (20%)
Other
Most Voted
A voting comment increases the vote count for the chosen answer by one.
Upvoting a comment with a selected answer will also increase the vote count towards that answer by one.
So if you see a comment that you already agree with, you can upvote it instead of posting a new comment.
Dex24
7 months agoCam22
8 months, 3 weeks ago