Finance
Under Massachusetts law, a predatory lending practice that charges a borrower excessive fees and a high interest rate on a high-cost loan may violate:
AOnly federal RESPA
BMassachusetts Chapter 183C (Predatory Home Loan Practices Act)✓ Correct
COnly the Massachusetts Consumer Credit Cost Disclosure Act
DOnly TILA
Explanation
Massachusetts Chapter 183C (the Predatory Home Loan Practices Act) provides additional consumer protections beyond federal law for high-cost home loans. It restricts certain loan terms, fees, and practices that constitute predatory lending.
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Key Terms to Know
Amortization
The gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Math Concepts
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