CRCM

CRCM practice questions, page 8 of 19, with answer review and explanations.

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

  1. Consumer protection principles
  2. Underwriting standards
  3. Workout arrangements
  4. None of these

Question 37

Supervisory review should also be the part of Subprime Mortgage Lending. It should review:

  1. Regulatory agencies will continue to focus on risk management review and consumer compliance processes
  2. Hiring and Training of personnel
  3. Agencies will continue to take action against institutions that violate consumer protection laws or fair lending laws or that engages in unfair or deceptive acts or practices or in unsafe or unsound lending practices
  4. Applicability of prepayment penalties

Question 38

The act limited balloon payments in consumer leases and enabled consumers to compare lease terms with credit terms where appropriate. The act was implemented by Regulation M (Consumer Leasing). It requires disclosures to consumers before consummation of the lease agreement. This act is:

  1. Consumer leasing act
  2. Risk disclosure act
  3. ALLL
  4. None of these

Question 39

Content of segregated disclosures in Consumer Leasing Act include all of the following EXCEPT:

  1. Amount due at lease signing or delivery, itemized by type and amount, including: Refundable security deposit Advance monthly or other periodic payment Capitalized cost reduction An itemization of how the amount due will be paid, by type and amount (only required in a motor vehicle lease), using the model form
  2. Number, amount, and due date of payments scheduled and the total amount of periodic payments
  3. In an open-end lease, the descriptive statement "You will owe an additional amount if the actual value of the vehicle is less than the residual value"
  4. If there are multiple items of property, the property description may be separate

Question 40

In a motor vehicle lease, a mathematical progression showing how the periodic payment is derived, containing the following information:

  1. Gross capitalized cost (including the agreed-on value of the vehicle)
  2. Rent charge (the difference between the total of base payment over the lease term minus the depreciation and any amortized amounts)
  3. Itemization of other charges that are part of the periodic payment
  4. All of the above