If the Mortgage Loan Is Going to Be Packaged with Similar

question 11

Multiple Choice

If the mortgage loan is going to be packaged with similar loans and then resold to investors as part of a commercial mortgage-backed security, the originating lender may rely more heavily on examining which of the following ratios in order to determine the maximum amount they are willing to lend to the borrower? (Note: This ratio indicates the cash-on-cash return the lender would earn on its invested capital if it had to foreclose on the property immediately after originating the loan)

• A) Debt coverage ratio
• B) Debt yield ratio
• C) Debt service ratio
• D) Equity dividend ratio

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Definitions:

Oxygenated Blood

Blood rich in oxygen, typically found in the arteries, which has been oxygenated in the lungs and is being transported to body tissues.

Diastolic Pressure

A measure of blood pressure between contractions of the heart.

Systolic Pressure

A measure of blood pressure generated by the heart’s contraction.

Cardiovascular Risk

The potential likelihood of an individual developing heart disease or stroke, influenced by factors such as high blood pressure, cholesterol levels, smoking, and diabetes.