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

"Pyramiding of debt" refers to borrowing from one lender to repay another lender.

While considering an individual's income levels,a bank generally prefers the borrower report ______________________ rather than gross salary.

Competition for consumer loans tends to drive the interest rates on these loans down closer to loan production costs.

A customer wants to borrower $25,000 for one year from TRC State Bank.The bank offers a discount loan with an interest rate of 15 percent.How much of the loan will be available to the customer?

Many home mortgage agreements include an additional charge levied up front called _____________________.Generally,each of these corresponds to one percent of the face value of the amount borrowed.

A bank customer is granted credit for a $2,000 loan at 10 percent to be repaid in 12 equal installments.If the loan quoted has an add-on rate,what are the net proceeds of the loan?

According to the textbook,personal loans tend to have lower interest rates than automobile loans.

An auto loan usually carries with it a chattel mortgage,giving the bank a claim against the property covered by the loan.

In the case of a borrower without a credit record or a very poor track record,a _______________ may be requested to support repayment.Technically if the borrower defaults on the payment,they are obligated to repay the loan.

Finance companies are the most dominant lenders of credit to households in the United States with commercial banks ranked second as consumer lenders.

Consumer loans appear to have virtually no sensitivity to the business cycle,staying relatively stable through both recessions and expansions.

Under the simple interest method,a customer saves on interest as an installment loan approaches maturity.

Equifax,Transunion,and _________________ are the three biggest credit bureaus in the United States.

Which of the following bodies is created under the recently passed Dodd-Frank Wall Street Reform and Consumer Protection Act?

Credit-scoring systems tend to be valid over long periods of time (usually several years)and need not be periodically retested.

FICO credit scoring system provides credit scores in the range of:

The fact that a consumer feels a strong moral and ethical responsibility to repay a loan on time refers to the ______________________ of the borrower.The loan officer must be assured that the borrower is serious about repaying the loan before the lending institution makes a loan.

Regulations under which of the following law(s)must be complied with by the banks dealing in mortgage lending?

Most consumer loans are priced off some base or cost rate.

The right of ______________________ allows a bank to call a loan that is in default and seize any checking or savings deposits the customer may hold with the bank in order to recover its funds.