Certified Regulatory Compliance Manager (CRCM) — Question 98

According to the 2007 interagency statement on subprime mortgage lending, what should an institution offering mortgage loans to subprime borrowers provide before submission of an application?

Answer options

• A. Information on local residential real property values
• B. Payment shock information
• C. Truth in Lending disclosures
• D. Initial escrow statements

Correct answer: B

Explanation

The correct answer is B, as the statement emphasizes the need for institutions to inform subprime borrowers about potential payment shocks before they apply. The other options, while relevant to mortgage lending, do not specifically address the requirements set forth for subprime borrowers outlined in the statement.