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Banking CRCM Exam Questions
CERTIFIED REGULATORY COMPLIANCE MANAGER (CRCM) (Page 22 )

Updated On: 6-Apr-2026
Page 22 of 276
PDF with 463 Questions

Institutions that offer nontraditional mortgage products should make sure they comply with the following, as applicable, EXCEPT:

  1. Truth in Lending Act
  2. FTC Act (i.e., Unfair and Deceptive Acts and Practices)
  3. RESTA
  4. State laws prohibiting deceptive trade practices

Answer(s): C



Underwriting standards in Subprime Mortgage Lending include:

  1. The borrower's debt-to-income ratio should include the borrower's total yearly housing-related payments as a percentage of gross monthly income
  2. Institutions should have a clear policy governing the use of risk-layering features, such as reduced documentation loans or simultaneous second lien mortgages
  3. Stated income and reduced documentation loans to subprime borrowers should be made only if there are clear, documented mitigating factors
  4. Mitigating factors should be present when risk layering features are combined in order to support the underwriting decision and the borrower's repayment capacity

Answer(s): A



Underwriting standards in Subprime Mortgage Lending include:

  1. The borrower's debt-to-income ratio should include the borrower's total yearly housing-related payments as a percentage of gross monthly income
  2. Institutions should have a clear policy governing the use of risk-layering features, such as reduced documentation loans or simultaneous second lien mortgages
  3. Stated income and reduced documentation loans to subprime borrowers should be made only if there are clear, documented mitigating factors
  4. Mitigating factors should be present when risk layering features are combined in order to support the underwriting decision and the borrower's repayment capacity

Answer(s): A



Underwriting standards in Subprime Mortgage Lending include:

  1. The borrower's debt-to-income ratio should include the borrower's total yearly housing-related payments as a percentage of gross monthly income
  2. Institutions should have a clear policy governing the use of risk-layering features, such as reduced documentation loans or simultaneous second lien mortgages
  3. Stated income and reduced documentation loans to subprime borrowers should be made only if there are clear, documented mitigating factors
  4. Mitigating factors should be present when risk layering features are combined in order to support the underwriting decision and the borrower's repayment capacity

Answer(s): A



Below mentioned is the necessary information that should be included in the _.
Risk of payment shock--potential payment increases; how the new payment will be calculated when the introductory rate expires
Ramifications of prepayment penalties--how they will be calculated, when they will be imposed
Ramifications of balloon payments
Ramifications of the lack of escrowing for taxes and insurance--who is responsible for paying taxes and insurance and the fact that their costs may be substantial Cost of reduced documentation loans--whether there is a pricing premium required

  1. Consumer protection principles
  2. Underwriting standards
  3. Workout arrangements
  4. None of these

Answer(s): A



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