Loan participations are:
A)riskier than loan assignments
B)less risky than loan assignments
C)always sold without recourse
D)always sold with partial recourse

Question

Quizplus · Accepted Answer

Loan participations are generally considered riskier than loan assignments because in a loan participation, the participant relies on the originating lender to service the loan and deal with the borrower, which adds an additional layer of risk compared to a loan assignment where the assignee typically assumes direct rights and responsibilities related to the loan.

Loan Participations Are