Loan flipping is the practice of refinancing a loan multiple times to generate fees for the lender. This can result in prepayment penalties for the borrower, which would make it a disadvantageous practice for them. It may not always benefit the lender either, as the process could result in the borrower defaulting on the loan with each refinancing. Therefore, option A is the correct answer.

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Loan Flipping

Question 58

Multiple Choice

Loan flipping

A) may result in prepayment penalties for the borrower.
B) is always a good idea for a homeowner.
C) rarely benefits the lender.
D) usually benefits both the borrower and the lender.

Correct Answer: