CFPB Mortgage Compliance Training (MCT) 4 Practice Test

Question: 1 / 400

What is the primary goal of loss mitigation strategies?

To maximize lender profits

To assist struggling borrowers in avoiding foreclosure

The primary goal of loss mitigation strategies is to assist struggling borrowers in avoiding foreclosure. These strategies are designed to provide support to homeowners who are experiencing financial difficulties, enabling them to keep their homes and fulfill their mortgage obligations. By offering solutions such as loan modifications, repayment plans, or forbearance agreements, lenders aim to help borrowers stabilize their financial situations.

This approach benefits all parties involved by potentially reducing the overall costs linked to foreclosure processes, preserving property values, and maintaining community stability. Loss mitigation is rooted in the understanding that keeping borrowers in their homes is often more advantageous than pursuing foreclosure, which can be time-consuming and costly for lenders. The focus on supporting borrowers ultimately aligns with broader regulatory goals and consumer protection policies established by agencies like the CFPB.

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To sell off distressed assets

To reduce property values

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