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ABC National Bank Regularly Purchases Mortgage Loans from ACME Mortgage

Question 88

Multiple Choice

ABC National Bank regularly purchases mortgage loans from ACME Mortgage Company, a local mortgage broker. ACME places a mandatory arbitration clause in each of its mortgage documents. ACME believes this clause is necessary because of state laws governing arbitration. Is this clause a problem for ABC National?


A) No, unless other predatory or abusive lending practices are evident in the loans sold by ACME.
B) Yes, the clause is a sign of an abusive lender, and the bank should not purchase the loans.
C) Yes, the bank should make ACME strike the clause from future loans.
D) No, this is a common practice and the bank can ignore it.

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