Tori has a home mortgage where the lender is providing 100% of the purchase price of the house. What is this type of loan called, and what is the risk from the perspective of the bank?
A) This is a zero-down mortgage, and it has a significantly higher risk of default.
B) This is a zero-down mortgage, and it will take longer to recoup the investment.
C) This is a negative amortization mortgage, and there is no significant risk to the bank.
D) This is a no documentation mortgage, and it has a significantly higher risk of default.
Correct Answer:
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