West Virginia Mortgage Law Practice Test

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Prepare for the West Virginia Mortgage Law Exam with our comprehensive test. Study using various questions and insights to strengthen your understanding of mortgage regulations and laws in West Virginia. Gear up and ensure you pass your exam!

Practice this question and more.

Marcia's advertisement violates the law because the product advertised:

Contains a balloon payment
Contains a prepayment penalty
Is a fixed-rate loan
Is not actually available

The correct answer is: Contains a balloon payment

The correct answer highlights a specific feature of a mortgage product that can lead to legal violations in advertising. A balloon payment occurs when the loan requires a large payment at the end of the loan term, which can significantly increase the borrower's financial obligation unexpectedly. This feature, if not clearly disclosed in advertisements, can mislead consumers about the true cost and terms of the mortgage product, thereby violating regulations designed to protect consumers from deceptive practices. In contrast, the other options do not necessarily violate advertising laws when disclosed properly. A prepayment penalty can be applicable in some loan agreements but must be explicitly stated to inform potential borrowers. A fixed-rate loan is a standard and widely accepted loan type and does not inherently involve misleading or harmful terms. Lastly, an advertisement for a product that is not available could also violate advertising standards, but the presence of a balloon payment is a more common and significant issue concerning consumer protection laws in mortgage advertising.