HUD Counselor Training Study Guide – Module 1.4
Credit Knowledge
Predatory Lending - correct answer ✔✔Lenders offering loans with high fees and unclear terms.
Teaser Rates - correct answer ✔✔Initial temporary interest rate on an adjustable-rate mortgage.
Limited Time Offers - correct answer ✔✔Loan officers requiring immediate action with
statements like 'This is your only chance to get a loan!'
High-Risk Loans - correct answer ✔✔Loans with confusing terms, balloon payments, or steep
pre-payment penalties.
Higher Loan Amounts - correct answer ✔✔Lenders allowing borrowers to finance more money
than they need or can afford.
High Fees or Costs - correct answer ✔✔Lenders charging fees for unnecessary or nonexistent
products or services.
False or Hidden Disclosures - correct answer ✔✔Lenders misrepresenting costs or changing loan
terms before closing.
Loan Flipping - correct answer ✔✔Lenders encouraging borrowers to refinance existing loans to
collect additional fees or charge higher interest.
Identity Theft - correct answer ✔✔The act of stealing personal information to commit fraud or
other crimes.
Credit Knowledge
Predatory Lending - correct answer ✔✔Lenders offering loans with high fees and unclear terms.
Teaser Rates - correct answer ✔✔Initial temporary interest rate on an adjustable-rate mortgage.
Limited Time Offers - correct answer ✔✔Loan officers requiring immediate action with
statements like 'This is your only chance to get a loan!'
High-Risk Loans - correct answer ✔✔Loans with confusing terms, balloon payments, or steep
pre-payment penalties.
Higher Loan Amounts - correct answer ✔✔Lenders allowing borrowers to finance more money
than they need or can afford.
High Fees or Costs - correct answer ✔✔Lenders charging fees for unnecessary or nonexistent
products or services.
False or Hidden Disclosures - correct answer ✔✔Lenders misrepresenting costs or changing loan
terms before closing.
Loan Flipping - correct answer ✔✔Lenders encouraging borrowers to refinance existing loans to
collect additional fees or charge higher interest.
Identity Theft - correct answer ✔✔The act of stealing personal information to commit fraud or
other crimes.
