Practice Test Geeks(CRMP) Certified Reverse Mortgage Professional Practice Test
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Reverse Mortgage Products & Loan Origination Flashcards

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

Read the first 7 Reverse Mortgage Products & Loan Origination flashcards as text

  1. Under RESPA, what document must a HECM lender provide within 3 business days of receiving a complete loan application?

    Answer: Loan Estimate

    Following TRID rules, lenders must provide a Loan Estimate within 3 business days of a complete application for most mortgage products including HECMs.

  2. A HECM borrower has an existing forward mortgage of $80,000. How must this be handled at closing?

    Answer: It must be paid off with HECM proceeds at or before closing

    HECM loans must be in first-lien position, so any existing mortgage must be paid off at closing using loan proceeds.

  3. Which interest rate index has historically been used to calculate the adjustable-rate HECM's expected interest rate?

    Answer: Constant Maturity Treasury (CMT) or SOFR

    Adjustable-rate HECMs have historically used CMT indices, and SOFR has been introduced as the industry transitions away from LIBOR.

  4. What is the purpose of the HECM financial assessment conducted during origination?

    Answer: To evaluate ability and willingness to meet ongoing property obligations like taxes and insurance

    The financial assessment evaluates whether borrowers can sustain property charges such as taxes, insurance, and HOA fees throughout the loan.

  5. A Life Expectancy Set-Aside (LESA) is established when a borrower fails the financial assessment. What does a LESA do?

    Answer: Sets aside a portion of the Principal Limit to pay future property charges

    A LESA reserves funds from the Principal Limit specifically to cover property taxes, insurance, and similar charges for the estimated loan duration.

  6. Which of the following is a mandatory obligation that must be satisfied with initial HECM proceeds under the first-year draw limitation?

    Answer: Delinquent federal income taxes

    Federal tax liens are mandatory obligations that must be paid at closing from initial HECM proceeds to clear title.

  7. When a HECM borrower permanently moves to an assisted living facility, how long do they typically have before the loan becomes due and payable?

    Answer: 12 consecutive months of non-occupancy

    HUD allows up to 12 consecutive months of non-occupancy due to physical or mental incapacity before the loan becomes due and payable.