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