Rather than selling the home or deeding it back, Alex Garcia and the lender agree to change the note's terms so the monthly payment becomes manageable. What workout solution is this?
Correct Answer
C) Loan modification
Loan modification is correct because the facts match a negotiated change to loan terms, such as rate, term, or payment amount, intended to make the mortgage more affordable. That is the best description of the relationship, right, or legal concept tested here.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A comparison of the major mortgage loan types—conventional, FHA, VA, and USDA—covering their eligibility requirements, down payment amounts, mortgage insurance rules, and best use cases.
Predatory lending refers to unfair, deceptive, or abusive lending practices that impose unjustified terms on borrowers, often targeting vulnerable populations. It includes practices like excessive fees, inflated appraisals, and unnecessary refinancing.
RESPA is a federal law that requires lenders to provide borrowers with information about settlement costs, prohibits kickbacks and referral fees, and limits escrow account deposits. It applies to federally related mortgage loans.
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