EthicsQuestion 335 of 400
Which loan feature, when combined with a borrower who clearly cannot afford it, is a hallmark of predatory lending?
a.A fully amortizing fixed-rate loan within the borrower's budget
b.Excessive fees and a large balloon payment the borrower cannot meet
c.A clearly disclosed, competitive APR
d.A modest, verified down payment
Explanation
Excessive fees paired with an unaffordable balloon payment set the borrower up to fail and are hallmarks of predatory lending. An affordable amortizing loan, a competitive disclosed APR, and a verified down payment are all features of responsible lending.
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