Finance
In Washington, negative amortization occurs when:
AA property's value decreases
BMonthly payments are less than the interest owed, causing the loan balance to increase✓ Correct
CThe borrower pays extra principal each month
DThe lender reduces the interest rate over time
Explanation
Negative amortization occurs when the monthly payment is insufficient to cover the interest owed. The unpaid interest is added to the principal balance, causing the loan balance to grow rather than shrink over time.
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