When a Pass-Through Mortgage Security Is Issued, What Does the Issuing

question 24

Multiple Choice

When a pass-through mortgage security is issued, what does the issuing agency expect to receive?

• A) the amount of the original loan plus a servicing fee
• B) the principal and interest that are paid by the homeowner
• C) the principal and interest that are paid by the homeowner, minus a servicing fee
• D) the interest paid by the homeowner, plus a servicing fee

---

Definitions:

Title Insurance

An insurance policy that protects real estate owners and lenders against any property loss or damage they might experience due to liens, encumbrances, or defects in the title to the property.

Construction Period Interest

Interest expense incurred during the construction of a long-term asset, which can be capitalized and added to the asset's cost basis.

IFRS Guidelines

The set of international accounting standards and principles that guide how financial statements should be prepared and disclosed.

Impairment Loss

A reduction in the recoverable amount of a fixed asset or goodwill below its carrying amount recorded on the balance sheet.