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A balloon payment on a California covered loan with a term of less than 5 years is:

Correct Answer

B) Prohibited

Balloon payments are prohibited on covered loans with terms of less than 5 years under CFL §4973.

Answer Options
A
Allowed with borrower consent
B
Prohibited
C
Allowed if clearly disclosed
D
Allowed for loans under $100,000

Why This Is the Correct Answer

Balloon payments are prohibited on covered loans with terms of less than 5 years under CFL §4973.

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