Question

Read the scenario.

Casey has signed a 30-year fixed-rate mortgage contract to buy a house. The contract includes a clause specifying a late payment fee of 5% of the overdue amount if a payment is more than 15 days late. The contract includes a privacy clause that ensures the lender will not share her financial information with third-party companies without her consent, except as required by law. The contract states that any disputes about loan servicing or property valuation must be submitted to binding arbitration, where a third-party arbitrator will decide.

What is the purpose of the privacy clause in Casey's mortgage contract?

to permit the lender to publicize Casey’s purchase details
to ensure Casey’s financial information is sold to the highest bidder
to guarantee Casey receives savings and marketing from third parties
to prevent unapproved sharing of Casey’s financial details

Answer 1

to prevent unapproved sharing of Casey’s financial details