Finance
NC's 'anti-predatory lending' provisions under G.S. Chapter 24 restrict which loan features on certain high-cost residential loans?
AFixed interest rates
BPrepayment penalties, balloon payments, and negative amortization on covered loans✓ Correct
CFHA mortgage insurance
DVA funding fees
Explanation
NC Chapter 24 anti-predatory lending provisions restrict or prohibit certain features on high-cost home loans, including prepayment penalties, certain balloon payments, negative amortization, and flipping.
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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.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
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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