Finance
In South Dakota, 'predatory lending' practices may include all of the following EXCEPT:
ALoan flipping (refinancing loans repeatedly to generate fees)
BCharging excessive fees and interest rates targeting vulnerable borrowers
CProviding accurate loan disclosure documents to borrowers✓ Correct
DMisrepresenting loan terms to borrowers
Explanation
Providing accurate loan disclosure documents is a legitimate and legally required practice, not predatory lending. Predatory lending involves deceptive, abusive, or unfair lending practices such as excessive fees, misleading terms, loan flipping, or targeting vulnerable populations.
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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.
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.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
Promissory NoteA written promise to repay a loan under specified terms — the borrower's personal financial obligation in a real estate transaction.
Math Concepts
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