Which of the following is NOT one of the 4 Cs used in assessing Ability to Repay?

The 4 Cs used in assessing an individual's ability to repay a loan are Character, Capacity, Collateral, and Capital. Each of these elements plays a crucial role in the underwriting process, helping lenders determine the creditworthiness of a borrower.

Character refers to the borrower's credit history, including their past behavior in repaying debts. This is assessed through credit scores and reports, providing insight into how responsibly the individual has handled credit in the past.

Capacity relates to the borrower’s ability to make the loan payments on time, which involves analyzing income, debts, and employment stability. This is a critical measure of whether the borrower can manage additional financial obligations without straining their budget.

Collateral is the asset that secures the loan. In a mortgage loan, this would be the property itself, which provides some level of protection for the lender in case the borrower defaults. This helps reduce the lender's risk.

Compliance, while important in the lending process, does not fall within the scope of the 4 Cs used to assess ability to repay. It generally refers to adherence to laws and regulations governing mortgage lending rather than evaluating borrower repayment capacity. Therefore, it is not one of the primary factors when lenders assess whether a borrower can afford to repay a loan.