Chap018 - Chapter 18 Consumer Loans, Credit Cards, and Real...

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Chapter 18 Consumer Loans, Credit Cards, and Real Estate Lending Fill in the Blank Questions 1. The purchase of a house or a multifamily dwelling such as a duplex, triplex or apartment building is usually financed through the use of a______________________ loan. Answer: residential mortgage 2. A(n)______________________ loan is a short- or medium-term loan repayable in two or more consecutive payments, usually monthly or quarterly. Answer: installment 3. Household borrowings tend to be ______________________. Consumers are more concerned about the size of the debt repayments than the interest rate charged. Answer: interest inelastic 4. The fact that a consumer feels a strong moral and ethical responsibility to repay a loan on time refers to the ______________________ of that individual. The loan officer must be assured that the borrower is serious about repaying the loan before they are willing to make a loan. Answer: character 5. When a borrower receives a loan at one lending institution to repay another it is called ________ ___________________ Answer: pyramiding of debt 6. The______________________ allows a bank to call a loan that is in default and seize any checking or savings deposits the customer may hold with the bank in order to recover its funds. Answer: right of offset 7. ______________________ is a method to evaluate a large volume of consumer loans quickly with minimum labor. This method is a statistical model which predicts whether the consumer will repay the loan or not. Answer: Credit scoring 8. A(n)____________________________________________ is where the customer can use the difference between some percentage of the appraised value of their home and the mortgage remaining to secure a loan. This loan can be used to fund a college education, pay for a vacation or pay for home improvements. Answer: home equity loan Test Bank, Chapter 18 304
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9. The law that requires the full disclosure of credit terms and which promotes the informed use of credit is the ______________________. This law requires the bank to report the APR of the loan, the dollar amount of all finance charges and, where appropriate, all fees. Answer: Truth in Lending Act 10. The law that limits how far a creditor or credit collection agency can go in pressing a customer to pay a past due debt is the ______________________. It does not allow a debt collector to "harass" a debtor. Answer: Fair Debt Collection Practices Act 11. Short-term credit to finance the building of homes or other dwellings is called ______________________. Answer: construction loans 12. A(n)______________________ is a credit-rating agency that keeps records of borrowers' loan payment histories. Answer: credit bureau 13. The____________________________________________ permits consumers to dispute billing errors with a merchant or credit card company and receive a prompt investigation into any billing errors. Answer: Fair Credit Billing Act
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Chap018 - Chapter 18 Consumer Loans, Credit Cards, and Real...

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