When There Is an Increase in the Loan Balance Due

question 12

Multiple Choice

When there is an increase in the loan balance due to payments less than the interest charge on an adjustable rate mortgage,the result will be:

• A) negative amortization
• B) interest rate volatility
• C) payment in full of the entire loan balance
• D) a foreclosure

Analyze the causes and conditions that terminate an insurer's duty to perform under a policy.

Understand the role and implications of coinsurance, pro rata, and other clauses in managing and distributing insurance losses.

Recognize the requirements and conditions for insurable interest in property and life insurance policies.

Identify conditions under which policy reformation or adjustments occur due to misunderstanding or omissions.

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Definitions:

Income Tax Deductions

Expenses that can be subtracted from gross income to determine taxable income, thereby reducing the overall tax liability.

Forgery

The illegal act of creating, altering, or imitating objects, documents, or signatures with the intention to deceive.

Federal Common Law

Federal common law refers to laws developed by Federal courts in the absence of detailed statutory guidance, often based on precedent or principles derived from the U.S. Constitution.

Vicariously Liable

The legal principle where one party is held liable for the actions of another party, such as an employer for the acts of its employees.