CRMP CRMP Loan Servicing and Post-Closing Requirements Questions and Answers 1

Question 1

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

Accepted Answer

The loan becomes due and payable

Answer

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

Question 2

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

Accepted Answer

Paying property taxes and homeowner's insurance

Answer

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

Question 3

What is a HECM 'due and payable' event?

Accepted Answer

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

Answer

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

Question 4

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

Accepted Answer

For as long as they meet deferral period requirements

Answer

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

Question 5

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

Accepted Answer

6 months, with possible extensions up to 12 months

Answer

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

(CRMP) Certified Reverse Mortgage Professional Practice Test