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CRCM Exam - Question 36

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

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Correct Answer: A

The necessary information about the risk of payment shock, potential payment increases, ramifications of prepayment penalties, balloon payments, lack of escrowing for taxes and insurance, and the cost of reduced documentation loans is essential to ensure consumers are fully informed about the potential risks and costs associated with their mortgage loans. Including this information aligns with consumer protection principles, which aim to safeguard consumers by providing transparency and enabling them to make informed decisions about their loans.

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Cam22Option: A
Mar 15, 2024

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.