Exam CRCM topic 1 question 36 discussion

Actual exam question from ABA's CRCM

Question #: 36
Topic #: 1

Below mentioned is the necessary information that should be included in the ___________. Risk of payment shock""potential payment increases; how the new payment will be calculated when the introductory rate expires Ramifications of prepayment penalties""how they will be calculated, when they will be imposed
Ramifications of balloon payments Ramifications of the lack of escrowing for taxes and insurance""who is responsible for paying taxes and insurance and the fact that their costs may be substantial Cost of reduced documentation loans""whether there is a pricing premium required

A. Consumer protection principles
B. Underwriting standards
C. Workout arrangements
D. None of these

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Suggested Answer: A 🗳️

by Cam22 at March 15, 2024, 12:57 a.m.

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Cam22

4 months ago

This information is essential for ensuring consumers are fully informed about the potential risks and costs associated with their mortgage loans. Including details on payment shock, prepayment penalties, balloon payments, the lack of escrowing for taxes and insurance, and the cost of reduced documentation loans aligns with consumer protection principles. These principles aim to safeguard consumers by providing transparency and enabling them to make informed decisions about their loans.

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Exam CRCM topic 1 question 36 discussion

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Cam22

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