Community spokesperson: After a recent surge of foreclosures, many homes in our community are vacant and falling into disrepair. Property values are already falling, and, if action is not taken quickly, will fall even further when panicked residents begin to leave. Clearly the only way to prevent a snowball effect is to make it easy to purchase these vacant homes by offering potential buyers special mortgages with a low interest rate for the first two years.
Which of the following, if true, represents the most significant potential problem with the plan to attract buyers through special mortgage offers?
A- Interest rates in the area are already at a 5-year low, and it would be foolish of lenders to lower them even more.
B- rime rates in the area have risen by 1% in the last year, making it less likely that potential buyers will be interested in moving to the area.
C- Most residents have lived in the area for over 20 years and do not want to leave their homes.
D- Low interests rates will likely attract buyers who will be unable to make payments when the interest rate goes up after the first two years.
E- There are few mortgage brokers in the area, making it unlikely that there will be enough personnel to assist a rush of potential home buyers.
OA :
The plan to attract potential buyers by offering low-interest rate mortgages for the first two years rests on which of the following assumptions?
A- Vacant homes will always fall into disrepair.
B- Homes in the area remain vacant mostly because it is too difficult for potential buyers to get mortgages.
C- Lenders have enough confidence in their knowledge of interest rates that they can predict what will be considered
a low rate for the next two years.
D- Some home owners may stay in the community, but their property values will decrease.
E- Vacant homes will cause residents to panic.
OA: