CRMP - Certified Reverse Mortgage Professional Application and Origination Questions and Answers

Question 1

A prospective HECM borrower is gathering documents for their application.
Which of the following is a standard document required during the origination process to verify the borrower's identity and age?

Accepted Answer

A valid, unexpired state-issued driver's license or ID card

Answer

A copy of their birth certificate

Answer

An original Social Security card

Answer

A signed affidavit from a family member

Question 2

A loan originator is working with a married couple. The husband is 70 years old, but his wife is 59. They want to proceed with a HECM. The wife will be classified as a Non-Borrowing Spouse (NBS). To ensure the wife can remain in the home after her husband passes away under the deferral period, what specific action must occur at origination?

Accepted Answer

The wife must be specifically identified as an 'Eligible Non-Borrowing Spouse' in the loan documents.

Answer

The wife must sign the note and mortgage along with her husband.

Answer

The loan amount must be reduced by a factor based on the wife's age.

Answer

A life insurance policy must be purchased in the husband's name for the benefit of the lender.

Question 3

During the Financial Assessment, an underwriter determines that a borrower may struggle to pay their future property taxes and homeowners insurance. To mitigate this risk, the underwriter requires a portion of the HECM proceeds to be set aside to cover these future charges. What is this set-aside called?

Accepted Answer

Life Expectancy Set-Aside (LESA)

Answer

Property Charge Escrow Account

Answer

Tax and Insurance Impound Fund

Answer

Borrower's Future Obligation Fund

Question 4

An applicant for a HECM owns a condominium. What is a critical property eligibility requirement specific to this type of dwelling?

Accepted Answer

The condominium project must be approved by the Federal Housing Administration (FHA) or meet single-unit approval guidelines.

Answer

The condominium must be in a building that is at least 10 years old.

Answer

The unit must have its own separate utility meters.

Answer

The homeowner's association (HOA) fees must be lower than the county average.

Question 5

Which of the following documents is uniquely required for a HECM-to-HECM refinance application to ensure the transaction provides a tangible benefit to the borrower?

Accepted Answer

The Home Equity Conversion Mortgage Anti-Churning Disclosure

Answer

The HECM Counseling Certificate

Answer

The HUD/VA Addendum to the URLA (Form 92900-A)

Answer

The Notice of Right to Receive a Copy of the Appraisal

Question 6

A borrower applies for a HECM and the Financial Assessment reveals they have a history of paying their previous mortgage and installment loans on time, but have been more than 90 days late on two credit card payments in the last 24 months. How would an underwriter most likely proceed?

Accepted Answer

Require a fully funded Life Expectancy Set-Aside (LESA) due to the credit risk.

Answer

Automatically deny the loan due to major derogatory credit.

Answer

Approve the loan with no additional requirements.

Answer

Disregard the credit card payments as they are unsecured debt.

A prospective HECM borrower is gathering documents for their application.Which of the following is a standard document required during the origination process to verify the borrower's identity and age?

A prospective HECM borrower is gathering documents for their application.
Which of the following is a standard document required during the origination process to verify the borrower's identity and age?