Mortgage Agent Licensing Practice Exam · Question
Which of the following is an example of 'predatory lending'?
Predatory lending involves unfair, deceptive, or fraudulent practices by lenders to induce borrowers into loans that are harmful or unnecessary, often with exce
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Question: Which of the following is an example of 'predatory lending'?
Answer options:
- Offering a conventional mortgage with competitive rates.
- Providing clear, detailed disclosures about mortgage terms. ✅ Lending at excessively high rates to borrowers who clearly cannot afford the repayment, with the intention of foreclosing.
- Refusing a loan application due to a low credit score.
Correct answer: Lending at excessively high rates to borrowers who clearly cannot afford the repayment, with the intention of foreclosing.
Explanation: Predatory lending involves unfair, deceptive, or fraudulent practices by lenders to induce borrowers into loans that are harmful or unnecessary, often with excessive fees or rates, with the intent to profit from the borrower's inability to repay.
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Question explanations
- Which of the following is NOT a primary provider of mortgage default insurance in Canada?
- When must a mortgage agent provide the borrower with certain disclosures regarding the proposed mortgage, part
- Michael and Jennifer are applying for a mortgage to purchase a home in Calgary for $700,000. Their combined gr
- Which of the following scenarios would typically lead to a higher mortgage interest rate for a borrower?
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