Final answer:
The correct answer to the question is B) Financial counseling. High-cost home loans require the borrower to receive financial counseling from a HUD-approved counselor to ensure informed decisions are made.
Step-by-step explanation:
A creditor may not make a high-cost home loan unless it receives written certification that the borrower has obtained financial counseling on the advisability of the mortgage loan from a HUD-approved counselor. The options given were A) Legal advice, B) Financial counseling, C) Investment guidance, D) Appraisal assistance. The correct answer is B) Financial counseling. This requirement is designed to ensure that borrowers are fully informed about the risks and implications associated with taking on a high-cost mortgage and can make an educated decision.
In the context of financial capital markets and lending, banks typically require detailed information about incomes sources, credit checks, and sometimes collateral or a cosigner as a backup in case the borrower defaults on the loan. This is related to the overall process of lending and the measures taken to minimize risks associated with loans.