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Banking CRCM Exam Questions
CERTIFIED REGULATORY COMPLIANCE MANAGER (CRCM) (Page 20 )

Updated On: 24-Feb-2026
Page 20 of 276
PDF with 463 Questions

Which of the following comes under the heading of nontraditional mortgage product risks?

  1. Reduced documentation adds risk to a mortgage loan.Institutions may rely on reduced documentation in the credit underwriting process.Income and credit verification may not be obtained.Use of reduced documentation should be subject to clear policies that require more documentation when the credit risk rises
  2. Reduced documentation adds risk to a mortgage loan.Institutions may rely on reduced documentation in the credit underwriting process.Income and credit verification may not be obtained.Use of reduced documentation should be subject to clear policies that require more documentation when the credit risk rises
  3. Perform due diligence before entering into third-party relationships, including a review of the third party's
    General competence
    Business practices and operations
    Reputation
    Financial capacity
    Internal controls
    Record of compliance with laws
  4. Amounts credited as recovery on a loan must not exceed all principal, finance charges, and fees previously charged off. Amounts that exceed these must be credited as income

Answer(s): A,B



Which of the following comes under the heading of nontraditional mortgage product risks?

  1. Reduced documentation adds risk to a mortgage loan.Institutions may rely on reduced documentation in the credit underwriting process.Income and credit verification may not be obtained.Use of reduced documentation should be subject to clear policies that require more documentation when the credit risk rises
  2. Reduced documentation adds risk to a mortgage loan.Institutions may rely on reduced documentation in the credit underwriting process.Income and credit verification may not be obtained.Use of reduced documentation should be subject to clear policies that require more documentation when the credit risk rises
  3. Perform due diligence before entering into third-party relationships, including a review of the third party's
    General competence
    Business practices and operations
    Reputation
    Financial capacity
    Internal controls
    Record of compliance with laws
  4. Amounts credited as recovery on a loan must not exceed all principal, finance charges, and fees previously charged off. Amounts that exceed these must be credited as income

Answer(s): A,B



In Guidance on Nontraditional Mortgage Product Risks, if the institution has a concentration in a nontraditional mortgage portfolio, the institution should:

  1. Have well-developed monitoring systems and risk management practices
  2. Monitor by originator and key borrower and portfolio characteristics
  3. Not understand the risk of payment shock and negative amortization
  4. A and B

Answer(s): D



In Guidance on Nontraditional Mortgage Product Risks, if the institution has a concentration in a nontraditional mortgage portfolio, the institution should:

  1. Have well-developed monitoring systems and risk management practices
  2. Monitor by originator and key borrower and portfolio characteristics
  3. Not understand the risk of payment shock and negative amortization
  4. A and B

Answer(s): D



In Guidance on Nontraditional Mortgage Product Risks, if the institution has a concentration in a nontraditional mortgage portfolio, the institution should:

  1. Have well-developed monitoring systems and risk management practices
  2. Monitor by originator and key borrower and portfolio characteristics
  3. Not understand the risk of payment shock and negative amortization
  4. A and B

Answer(s): D






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