If the Institution Offers Both Full and Reduced Documentation Loans

question 318

Multiple Choice

If the institution offers both full and reduced documentation loans and there is a pricing premium attached to the reduced documentation loan, the consumer should:

• A) Be alerted to this fact
• B) Not be alerted to this fact
• C) Provide consumers with a clear statement of the options available
• D) Not lead consumers with payment option ARMs to choose a non-amortizing or negatively amortizing payment

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Definitions:

Express Warranty

A guarantee explicitly stated by a seller about the quality, functionality, or condition of a product.

Warranty Of Merchantability

A guarantee implied by law that goods sold will be fit for their ordinary purpose.

Disclaimer

A statement that denies something, especially responsibility, or a statement that specifies limits to a particular area of knowledge or information provided.

Warranty Of Merchantability

assures that a product sold by a merchant is fit for the general purpose for which it is sold, meeting a buyer's reasonable expectations.