Final answer:
The statement is true; salespeople often ensure that mortgage and insurance approvals remain in place to prevent last-minute issues at closing. Securitization encourages the issuance of subprime loans, which can lead to defaults. Buyers often need mortgage insurance when they make down payments less than 20%, which adds to the total cost of the mortgage.
Step-by-step explanation:
Confirming that mortgage and insurance approvals remain in place for the day of closing is indeed often part of the Salesperson's services to a buyer. This statement is true. Ensuring that there are no changes in advance of the closing date can prevent any last-minute issues that may arise. Having an escrow service can be helpful in managing home insurance and property tax payments as part of a normal monthly payment, providing a streamlined financial process for the homeowner. Securitization may lead to the issuing of subprime loans by banks that are less concerned with the borrower's ability to repay, as they plan on selling the loan rather than holding it. This practice can cause serious economic consequences when loans like the infamously named NINJA loans are issued, as they often result in defaults and financial instability. To protect against the risk of default and to comply with certain loan requirements, buyers who cannot afford a 20% down payment usually must obtain mortgage insurance, which will increase the overall cost of the mortgage. It's crucial for a buyer to be informed about potential increases in mortgage payments if they opt for lower down payment options.