Financial Counseling Certification Program (FiCEP) Practice Exam

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Prepare for the Financial Counseling Certification Exam. Use flashcards and multiple choice questions with hints and explanations to boost your readiness. Ace your certification!

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True or False: "Cure default" is a method that can lead to repossessions.

True
False
Only for delinquent accounts
It varies by lender

The correct answer is: False

The concept of "cure default" primarily relates to the process by which a borrower rectifies a default situation, typically by bringing overdue payments up to date. When a borrower successfully cures a default, it means they have fulfilled their obligations to rectify the missed payments, thus preventing further actions such as repossession. In this context, saying "cure default" leads to repossessions would be misleading. Repossession typically occurs as a consequence of continued default or failure to make payments. Curing a default actively works against that outcome. Therefore, the assertion that "cure default" can lead to repossessions is false since the objective of curing a default is to avoid negative repercussions such as repossession. This aligns with the principles of loan servicing and debt management, where addressing overdue payments aims to maintain possession of the asset associated with the loan.