CRMP Application and Origination 3

Question 1

Under FHA Financial Assessment requirements, what are the two main factors a lender evaluates to determine a borrower's willingness and capacity to meet loan obligations?

Accepted Answer

Credit history and residual income

Answer

Financial Assessment examines credit history (willingness to pay) and residual income (capacity to pay) to determine if a LESA is needed.

Question 2

A HECM borrower chooses the fixed-rate option. Which disbursement plan is available to them?

Accepted Answer

Single lump sum disbursement only

Answer

Fixed-rate HECMs are only available with the single-disbursement lump-sum payment option, unlike adjustable-rate HECMs which offer multiple plans.

Question 3

What is the maximum origination fee a lender may charge on a HECM with a home value of $200,000?

Accepted Answer

$2,500

Answer

For homes valued at $125,000 or less the cap is $2,500; for homes above $125,000 the fee is 2% of the first $200,000, which equals $4,000, but the minimum floor is $2,500—so the answer for a $200,000 home is $4,000.

Question 4

Which scenario would trigger a maturity event requiring immediate repayment of a HECM?

Accepted Answer

The last surviving borrower permanently moves to an assisted living facility

Answer

A HECM becomes due when the last surviving borrower permanently moves out of the property, which includes relocation to a nursing home or assisted living for more than 12 consecutive months.

Question 5

When a HECM appraiser identifies needed repairs during the appraisal, how are those repairs typically handled?

Accepted Answer

Funds for required repairs are set aside in a Repair Set-Aside from loan proceeds

Answer

HUD allows a Repair Set-Aside to be withheld from loan proceeds to ensure required repairs are completed after closing.

(CRMP) Certified Reverse Mortgage Professional Practice Test

(CRMP) Certified Reverse Mortgage Professional Practice Test

CRMP Application and Origination 3