Exam 18: Consumer Loans, Credit Cards, and Real Estate Lending

The requirement that banks must provide their consumer loan customers with a statement of the APR for the proposed loan was established by the:

There are very little economies of scale (cost savings)in the credit card business.

Mark Green is considering buying a new Honda Accord. The purchase price of the car is $21,000 but Mark has a trade-in worth $4,500. Mark needs a loan to buy the car and knows that his local bank requires him to put down 10 percent of the purchase price after the value of the trade-in is considered. Mark also knows that bank will charge 8 percent for the loan and require monthly payments over the next 4 years. -What is the minimum down payment that Mark must make?

A customer is seeking a $150,000 home mortgage.The bank requires the customer to pay 1¾ points up front.How much of the loan amount will actually be available to the customer if the bank approves the loan?

The Community Reinvestment Act is designed to prevent a lender from arbitrarily marking out certain neighborhoods as undesirable and refusing to lend to people who live in those neighborhoods.

The interest rate method which requires the interest amount on a loan to be paid upfront is called the ______________________ method.

The federal law that permits consumers to dispute billing errors with a merchant or credit card company and receive a prompt investigation of any billing disputes is the:

Alexis Downs uses her credit card to buy furniture but pays off the credit card at the end of the month before she incurs any interest costs.How is Alexis using her credit card?

The federal law that requires banks to notify in writing to their credit customers when a loan request is denied is known as the:

______________________ is a basic method for calculating the interest owed on a loan that adjusts for declining balances and the time remaining on the loan.

The law that limits how far a creditor or credit collection agency can go in pressing a customer to pay a past due debt is the ______________________ Act.It does not allow a debt collector to "harass" a debtor.

As part of the new regulations of the mortgage market,the Federal Reserve Board moved to tighten the rules on mortgage lending in 2008.All of the following would improve transparency of the market except for:

The ______________________ is the internal rate of return that equates present value of the payments with the amount of the loan.It is the rate required to be reported under the Truth in Lending Act.

Which of the following has(have)proven to be important factor(s)in credit scoring models?

Which of the following is not a factor considered in the evaluation process of an installment loan?

When a borrower receives a loan at one lending institution to repay another,it is called ___________________________ of debt.

Mark Green is considering buying a new Honda Accord. The purchase price of the car is $21,000 but Mark has a trade-in worth $4,500. Mark needs a loan to buy the car and knows that his local bank requires him to put down 10 percent of the purchase price after the value of the trade-in is considered. Mark also knows that bank will charge 8 percent for the loan and require monthly payments over the next 4 years. -If Mark makes the minimum down payment on the car,what is the amount of the loan that Mark will receive?

Traditional home equity loans are usually priced using _______-term interest rates while home equity lines of credit are priced using _________-term interest rates.

Which of the following is true regarding credit card loans?

According to the text,which of the following is often the most profitable credit service a lender can offer?