CRMP Application and Origination 2

Question 1

A borrower's non-borrowing spouse is 57 years old and is listed on the title. What must occur before the HECM loan can close?

Accepted Answer

The spouse must attend counseling and be designated as an Eligible Non-Borrowing Spouse

Answer

The spouse must be removed from title

Answer

The spouse must co-sign the note

Answer

The loan must be denied until the spouse turns 62

Question 2

Which document formally initiates the HECM application process and must be signed by the borrower?

Accepted Answer

Uniform Residential Loan Application (1003)

Answer

Loan Estimate

Answer

Initial Counseling Certificate

Answer

Notice of Right to Cancel

Question 3

For a HECM for Purchase, what is the primary source of the required down payment?

Accepted Answer

The borrower's own funds or gift proceeds

Answer

A seller-held second mortgage

Answer

A bridge loan from the reverse mortgage lender

Answer

Funds borrowed from the borrower's 401(k)

Question 4

What is the purpose of the expected average mortgage interest rate (AEI/Expected Rate) in HECM calculations?

Accepted Answer

It is used to calculate the principal limit at origination

Answer

It determines the monthly service fee set-aside amount

Answer

It sets the interest rate charged to the borrower each month

Answer

It is used exclusively for adjustable-rate HECMs

Question 5

A borrower owns a home worth $900,000. What is the maximum property value used to calculate the HECM principal limit?

Accepted Answer

$822,375

Answer

$900,000

Answer

$726,200

Answer

$647,200

Question 6

Which flood zone designation generally makes a property ineligible for a HECM unless flood insurance is obtained?

Accepted Answer

Zone A or V

Answer

Zone X

Answer

Zone C

Answer

Zone B

Question 7

If a HECM borrower has an outstanding federal tax lien on the property, what must typically happen before closing?

Accepted Answer

The lien must be satisfied or a payment plan approved by the IRS must be in place

Answer

The lien is automatically subordinated to the HECM

Answer

The lien is ignored if the amount is under $10,000

Answer

The property must be re-titled to remove the lien