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CCC Housing & Mortgage Counseling Flashcards

6 cards from real CCC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 6 CCC Housing & Mortgage Counseling flashcards as text

  1. Which HUD program provides free or low-cost housing counseling services to help homebuyers and homeowners navigate mortgage issues?

    Answer: HUD Housing Counseling Program

    HUD's Housing Counseling Program funds approved agencies to offer free or affordable counseling on buying, renting, defaults, foreclosures, and more.

  2. What type of loan modification permanently changes the original terms of a mortgage to make payments more affordable for the borrower?

    Answer: Loan modification

    A loan modification permanently alters the mortgage terms—such as reducing the interest rate or extending the repayment period—to lower monthly payments.

  3. A client has a back-end debt-to-income ratio of 48%. How does this compare to conventional mortgage qualifying guidelines?

    Answer: It exceeds conventional guidelines, which typically cap the back-end DTI at 43–45%

    Conventional mortgage guidelines typically cap the back-end DTI at 43–45%, so a 48% ratio would likely require compensating factors or disqualify the applicant.

  4. In the context of reverse mortgages, who is eligible for a Home Equity Conversion Mortgage (HECM)?

    Answer: Homeowners age 62 or older who occupy the home as their primary residence

    HECMs, the most common reverse mortgage, are available only to homeowners aged 62 or older who live in the home as their primary residence.

  5. What is the purpose of an escrow account in a mortgage arrangement?

    Answer: To collect and pay property taxes and homeowners insurance on behalf of the borrower

    An escrow account collects a portion of the monthly payment to cover property taxes and insurance, ensuring these obligations are paid on time.

  6. A credit counselor notices a client's mortgage statement shows a 'negative amortization' situation. What does this mean?

    Answer: The loan balance is increasing because payments are less than the interest accruing

    Negative amortization occurs when minimum payments don't cover accrued interest, causing the unpaid interest to be added to the loan principal.