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

Tammy Payne wants to buy a used car and wants a loan that she will pay off over the next three years with monthly payments.Which of the following categories will this loan fall into?

Richard Thornton has applied for a home equity loan from Capital Two Bank.The bank on its part has estimated the market value of Richard's property at $750,000.If the amount of existing mortgage loan on the property is $500,000 and Capital Two as a policy lends only up to 70 percent of the borrowing base,what is the maximum amount of loan will Richard get?

A bank is considering making a loan to Sean Finnigan.Sean owns his own home and has lived there for the past four years.What aspect of evaluating a consumer loan application is this fact most concerned with?

Home mortgage real estate loans soared to record levels at the beginning of the 21^st century.

Credit cards are the best example of ______________________ that offer consumers convenience and flexibility.Consumers can access them whenever the need arises.

The board of directors and senior management of the banks that are awarded top CRA ratings are often committed to promote community involvement.

The ________________________________ Act permits consumers to dispute billing errors with a merchant or credit card company and receive a prompt investigation into any such disputes.

One of the elements used in the FICO credit scoring system is the borrower's employment history and salary.

The method for figuring out the loan rate wherein the interest amount owed on a loan is added to the principal amount of the loan to determine a borrowing customer's required installment payments is known as:

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's monthly payments are 362.53 per month,what is the total finance charge if he takes the full 4 years to pay off the loan?

______________________ is a method to evaluate a large volume of consumer loans quickly with minimum labor.It is a statistical model which predicts whether the ability of a consumer to repay the loan.

_____________________________ is the granting of loans to borrowers with below-average credit records.These loans tend to go to borrowers with a record of delinquent payments,previously charged-off loans,bankruptcies or court judgments.

A popular credit scoring system developed and sold by Fair Isaac Corporation is known as ___________.

Which of the following is an advantage of a credit scoring model?

The first major bank within the U.S.to establish a separate department for granting loans to consumers was:

The ________________________ Act provides consumers with an opportunity to order one free credit report annually from each of the three nationwide credit bureaus.

Jane Smith has asked for a 30 year mortgage (repayable in monthly installments)to purchase a home in Oklahoma City,Oklahoma.The purchase price of the home is $150,000 of which $125,000 must be borrowed.If the APR on this loan is 8 percent,how much will Jane's total financing charges be?

_________________________ loans are ones that families and individuals can draw upon for immediate cash needs and are repayable in a lump sum.These loans often cover the cost of a vacation,medical care,the purchase of a home appliance,or home repairs.

Paul Carter requests an automobile loan of $15,000 that will be repaid over the next four years in monthly repayments.The First National Bank tells Mr.Carter that his total finance charges will be $4675.20.What is the APR on this loan?

An installment loan is one where the customer repays the loan in two or more consecutive payments.These payments are often made monthly or quarterly.