Question

QUESTION 46 Bank managers at Dime Community Bancshares consider commercial real estate loans as riskier assets than both one-to-four family and multifamily residential real estate loans. This is partially because the borrower’s ability to repay the loan depends on the success of the commercial tenants who rent the property. True False

QUESTION 47

1. The performance of commercial real estate loans are insulated from the economic recessions.

   True

   False

2. QUESTION 48

3. The largest single asset type of Dime Community Bancshares is the adjustable-rate multifamily residential loan.

   True

   False

Answer 1

Q-46 True. Commercial loans are primarily sized and underwritten based on an asset’s projected net operating income (NOI), whereas Residential loans are underwritten based on the creditworthiness and income history of the individual purchasing the property. Hence, commercial loans are riskier assets.

Q-47 False. No class of real estate is immune to recessions.

Q-48 True. The largest single asset type of Dime Community Bancshares is the adjustable-rate multifamily residential loan.