Possible Negative Amortization Resulting from a Rise in the Interest

question 82

Multiple Choice

Possible negative amortization resulting from a rise in the interest rate on a adjustable rate mortgage may be avoided by

• A)raising the rate cap.
• B)lowering the payment cap.
• C)shortening the term of the mortgage.
• D)increasing the monthly payment.

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Definitions:

Auditor Liability

The legal responsibility of auditors for the financial reports they certify, especially if misconduct or negligence leads to investor or company losses.

Restatement Test

A principle used in tort law to determine the liability of parties based on the restatement (second or third) of torts, which are influential treatises summarizing the state of tort law.

Accountant Liability

Legal responsibility of an accountant for any negligent or fraudulent accounting practices resulting in financial loss.

Intended Receivers

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