CRMP Loan Servicing and Post-Closing Requirements Questions and Answers Flashcards

What happens to a HECM loan if the borrower permanently moves out of the property for more than 12 consecutive months?

Answer: The loan becomes due and payable

A HECM loan becomes due and payable if the borrower permanently vacates the property for more than 12 consecutive months.

Which of the following is a borrower's ongoing obligation under a HECM loan?

Answer: Paying property taxes and homeowner's insurance

HECM borrowers must continue paying property taxes, homeowner's insurance, and maintain the property to avoid default.

What is a HECM 'due and payable' event?

Answer: An event that triggers loan repayment, such as the borrower's death or sale of the home

A due and payable event triggers full repayment of a HECM, including the borrower's death, permanent move-out, or sale of the property.

How long do eligible non-borrowing spouses have to remain in the home after the borrowing spouse's death under current HUD guidelines?

Answer: For as long as they meet deferral period requirements

An eligible non-borrowing spouse may remain in the home indefinitely as long as they meet all HUD deferral period requirements.

What is the maximum timeframe a borrower's estate has to repay or sell the home after a HECM becomes due and payable?

Answer: 6 months, with possible extensions up to 12 months

Heirs typically have 6 months to repay or sell, and may request up to two 90-day extensions for a maximum of 12 months.

Which servicer action is required when a HECM borrower is delinquent on property charges?

Answer: Offering a repayment plan or LESA set-aside options

Servicers must offer loss mitigation options, including repayment plans, before initiating foreclosure on property charge delinquencies.