Finance
A mortgage loan with a 'teaser rate' of 2% for the first year that then adjusts to a much higher rate is most problematic because:
AThe lender profits more than allowed by law
BBorrowers may qualify based on the artificially low initial payment but be unable to afford payments after the rate adjusts✓ Correct
CThe loan violates the TRID disclosure requirements
DVariable rates are prohibited by Arkansas law
Explanation
Teaser rates qualify borrowers at payments much lower than what they will actually owe after adjustment. If borrowers cannot afford payments at the true market rate, they may face default. This was a contributing factor to the 2008 financial crisis.
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