223k views
3 votes
When an underwriter identifies more than one risk factor associated with the mortgage loan this is referred as?

User Pill
by
7.7k points

1 Answer

3 votes

Final answer:

When an underwriter identifies more than one risk factor associated with a mortgage loan, it is referred to as layering of risk factors.

Step-by-step explanation:

When an underwriter identifies more than one risk factor associated with a mortgage loan, it is referred to as layering of risk factors.

Layering refers to the practice of combining several risk factors to assess the overall risk associated with the loan. This can include factors such as high debt-to-income ratio, low credit score, and inadequate collateral.

An example of layering would be if a borrower has a low credit score, high debt-to-income ratio, and no collateral to secure the loan.

Each of these individual risk factors increases the overall risk of the loan, and when combined, they create a higher level of risk for the lender.

User OleGG
by
7.9k points