CRMP Client Assessment and Eligibility 4

Question 1

A borrower was previously delinquent on a FHA-insured loan and has an outstanding balance owed to HUD. Which action is required before HECM approval?

Accepted Answer

The debt owed to HUD must be resolved by repayment or an approved payment arrangement

Answer

Outstanding debts owed to HUD must be resolved prior to HECM approval, as the CAIVRS system will flag the borrower until the federal debt is cleared.

Question 2

A client with a terminal illness wants a HECM but plans to move to assisted living within 2 years. How should the CRMP advise them?

Accepted Answer

Explain that moving out as a primary residence triggers loan maturity and the balance becomes due

Answer

If the borrower no longer occupies the home as their primary residence, the HECM becomes due and payable, which is a critical consideration for clients planning to move.

Question 3

A borrower has a living trust that holds title to the property. What must be verified for HECM eligibility?

Accepted Answer

The trust must be an inter vivos revocable trust meeting HUD requirements, with the borrower as a beneficiary and trustee

Answer

HUD allows HECMs for properties held in qualifying inter vivos revocable trusts where the borrower is the beneficiary and retains control as trustee.

Question 4

During assessment, a borrower mentions their adult child lives in the home. What is the key eligibility consideration?

Accepted Answer

The adult child's occupancy is permitted and does not affect HECM eligibility as long as the borrower is the primary resident

Answer

Other occupants may reside in the home; what matters is that the eligible borrower occupies the property as their primary residence.

Question 5

A HECM borrower has been hospitalized for 8 months with no one else living in the home. What is the lender's obligation?

Accepted Answer

Monitor occupancy and communicate with the borrower since extended absences can trigger due-and-payable status

Answer

Extended absences for medical reasons have specific HUD guidelines allowing up to 12 consecutive months for medical care before triggering due-and-payable, requiring lender monitoring.

(CRMP) Certified Reverse Mortgage Professional Practice Test

(CRMP) Certified Reverse Mortgage Professional Practice Test

CRMP Client Assessment and Eligibility 4