Which One of the Following Best Describes Subprime Mortgage Lending

C it is where loans made only by private parts are sold. A subprime mortgage is a type of home loan in which credit underwriting has been relaxed compared to a prime mortgage.

Solved The Amount Of Money In Billions Of Dollars Lent To Chegg Com

43 All of the following statements are generally true about subprime lending except.

. Therefore the rate of interest charged should be. The interest rates are often mixed with the first two to three years at a fixed rate and the subsequent years adjusted to the fully indexed rate. Loan amounts up to 3 million.

Lending to people who do not have a bank account Answer. AThe value of homes remained higher than the mortgage so foreclosures decreased BMany people with subprime mortgages could not make their payments so foreclosures increased CBanks offered more subprime mortgages to avoid further foreclosures. Which one of the following describes systemic risk.

B it is where loans originated in the primary market are sold. Which of the following best describes and air loan. The correct answer is D.

The interest rate will be unconventional. 90 LTV on personal and business. The most common type of fraud involving.

Subprime lenders are predatory lenders. Education and research are key to avoiding predatory loans. These loans will remain in a lenders portfolio rather than be sold on the secondary market.

12 months personal bank statements and 24 months for business statements. The lifetime cap is 8. Which of the following statements best describes the secondary mortgage market.

Finance questions and answers. Which one of the following best describes sub-prime mortgage lending of 2008. Lending to people who do not have a bank account Ans.

Lending to people to buy houses who are at greater risk of being unable to meet the repayments c. 50 DTI with scores as low as 600. An individual securitys total risk B.

The periodic payments do not fully amortize the loan by the end of the term. This problem has been solved. To accommodate risk subprime lenders will charge higher closing costs and processing fees C.

Credit scores as low as 600. Responsible MLOs and underwriters will want to see compensating factors such as larger down payments or secondary financing to ensure that the loan can be paid off. All of the following statements are true about a partially amortized loan except.

A subprime loan is a type of loan offered at a rate above prime to individuals who do not qualify for prime-rate loans. Which one of the following describes systemic risk. Lending on overvalued properties d.

The down payment will be low or not required. Which of the following statements best describes a budget deficit. No tax returns needed.

D it is the market where second mortgages are originated. If interest rates are much higher now than when this bond was issued the coupon rate of that bond will likely be below the prevailing. Subprime loans are sometimes made to low-income and risky borrowers B.

As home prices continued to rise financial institutions increased the number of subprime loans they issued. Subprime lending occurs when financial institutions issue loans to individuals o who are less likely to be able to repay their loan than individuals who meet a set of standards. Which of the following formulas best describes the value of a bond.

Underwriting is the process of evaluating both the borrower and collateral to ensure that lender guidelines are met. An individual securitys total risk. In the context of the global economic crisis which of the following statements is true of subprime mortgage loans.

Subprime lenders charge higher interest rates D. Subprime mortgages are known for their high interest rates which lenders use to offset the risk involved. A bank lending to someone who is not one of their customers b.

Which one of the following describes systemic risk. A borrower with a 610 credit score is offered a subprime loan. Their subprime programs have some of these feature and benefits.

The final payment is a balloon payment. Prohibiting discrimination in mortgage lending transactions. The subprime mortgage boom in the years leading up to 2008 was arguably an example of predatory lending.

Quite often subprime borrowers have been turned down by traditional lenders. A partially amortized loan is a self-liquidating loan. 3What relationship existed between subprime mortgages and foreclosures when home prices fell.

The margin is set at 4 and the current index value has risen in the last month to 925. A borrower with a 610 credit score is offered a subprime. ECOA A mortgage broker may inform an applicant that Federal law requires the broker to ask about the race sex marital status and age by putting the information on a web site.

They were seen by the lenders as low-risk loans. Consider a coupon bond that sold at par value two years ago. Risk unique to a firms management.

Subprime loans are still being made today even in California. Risk that affects a. A subprime mortgage is a type of mortgage that is normally issued by a lending institution to borrowers with low credit ratings.

Landing to people to buy house who are at greater risk of being unable to meet the repayment describes subprime mortgage lending because of great practice in America before 2007 because the price of the house was increasing significantly. See the answer See the answer done loading. A it is the market where second mortgages are sold.

Risk that affects a large number of assets C. B True as long as the applicant consents and can access the information. All of the following statements about subprime lending is true EXCEPT.

PV of bond C 1k1 C 1k2. A False this information must be given to the applicant in person. A 7 1 ARM has a start rate of 4 an initial cap of 3 and a periodic cap of 1.

A fictitious borrower obtains a loan and secures it with a.

Subprime Mortgage Definition