In Order to Ensure That Borrowers Have an Ability to Repay

question 79

Multiple Choice

In order to ensure that borrowers have an ability to repay residential mortgages,the new consumer protection legislation requires lenders to do all of the following except

• A) verify the income of the borrower.
• B) verify the borrower's job status.
• C) check the credit history of the borrower.
• D) verify that the borrower can read and understand a loan contract.

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Definitions:

Recency-Frequency-Monetary Analysis

A marketing analysis technique that segments customers based on their most recent purchase, how often they buy, and how much they spend.

Future Profits

Anticipated earnings or gains in financial terms expected to be realized in the future from business activities or investments.

Performance Measurements

The evaluation of the effectiveness and efficiency of actions or operations within an organization.

Customer Equity Ratio

A metric that evaluates a company's ability to generate future revenues from its existing customer base compared to the resources expended on acquiring and retaining customers.