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Which of the following practices is PROHIBITED on California covered loans?

Correct Answer

B) Financing single-premium credit insurance

Financing single-premium credit life or disability insurance into a covered loan is prohibited under CFL §4973 because it inflates the loan amount with costly insurance the borrower may not need.

Answer Options
A
Charging origination fees
B
Financing single-premium credit insurance
C
Requiring hazard insurance
D
Offering fixed interest rates

Why This Is the Correct Answer

Financing single-premium credit life or disability insurance into a covered loan is prohibited under CFL §4973 because it inflates the loan amount with costly insurance the borrower may not need.

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