Finance
Which of the following is an example of 'predatory lending'?
ACharging a borrower a market-rate interest rate
BRequiring 20% down payment on a conventional loan
CSteering a qualified borrower into a high-cost subprime loan✓ Correct
DProviding a Loan Estimate within 3 business days
Explanation
Predatory lending involves unfair or deceptive practices that harm borrowers. Steering a creditworthy borrower into a higher-cost loan than they qualify for is a classic example, resulting in unnecessary costs and increased default risk.
Related California Finance Questions
- What is 'mortgage fraud'?
- Which federal agency insures FHA loans against default?
- The secondary mortgage market primarily functions to:
- Discount points paid on a mortgage loan are best described as:
- California is primarily a 'lien theory' or 'title theory' state for mortgages?
- What is a 'loan discount point'?
- A 'hard money loan' is typically characterized by:
- Private Mortgage Insurance (PMI) is typically required when a borrower's down payment is:
Practice More California Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free California Quiz →