CCC Housing & Mortgage Counseling Flashcards

Which federal agency oversees the approval of HUD-certified housing counseling agencies in the United States?

Answer: The U.S. Department of Housing and Urban Development (HUD)

HUD approves and oversees housing counseling agencies that provide federally supported counseling services.

A client is struggling to pay their mortgage after a job loss. Which foreclosure prevention option allows the lender to temporarily reduce or suspend mortgage payments?

Answer: Forbearance agreement

A forbearance agreement temporarily reduces or pauses mortgage payments while the borrower experiences a short-term hardship.

What does the term 'loan-to-value ratio' (LTV) represent in mortgage lending?

Answer: The loan amount divided by the appraised value of the property

LTV is calculated by dividing the mortgage loan amount by the appraised property value, expressed as a percentage.

Under the Real Estate Settlement Procedures Act (RESPA), what document must lenders provide to borrowers within three business days of receiving a mortgage application?

Answer: Loan Estimate

RESPA (as amended by TRID rules) requires lenders to provide a Loan Estimate within three business days of application.

A client's mortgage payment exceeds 28% of their gross monthly income. According to conventional guidelines, this is referred to as which type of ratio?

Answer: Front-end ratio

The front-end (or housing expense) ratio measures housing costs as a percentage of gross income, with 28% being the conventional guideline.

Which type of mortgage has an interest rate that adjusts periodically based on a financial index after an initial fixed period?

Answer: Adjustable-rate mortgage (ARM)

An ARM features a fixed rate for an initial period, after which the rate adjusts periodically based on a benchmark index.