CRMP Client Assessment and Eligibility 5

Question 1

A borrower has recently filed for Chapter 7 bankruptcy and the discharge is pending. What is the impact on HECM eligibility?

Accepted Answer

The HECM may proceed after discharge, but the bankruptcy must be reviewed as part of the financial assessment

Answer

A bankruptcy discharge resolves most credit obligations, and HECMs can generally proceed after discharge with the event reviewed in the financial assessment for context.

Question 2

Which of the following best describes the HECM Maximum Claim Amount (MCA)?

Accepted Answer

The lesser of the appraised value, the purchase price (for purchase transactions), or the FHA loan limit

Answer

The MCA is the lesser of the appraised value or FHA mortgage limit, which serves as the cap on the property value used to calculate HECM proceeds.

Question 3

A borrower aged 73 wants to add their 45-year-old non-spouse partner to the HECM. What should the CRMP explain?

Accepted Answer

The partner cannot be added as a borrower since they are under 62 and is not eligible as a non-borrowing spouse

Answer

Non-borrowing spouse protections apply only to legal spouses; a non-spouse partner under 62 cannot be a borrower or receive deferral protections.

Question 4

During client assessment, a CRMP learns the borrower co-owns the property with a sibling who is 55 years old. What is the eligibility concern?

Accepted Answer

All titleholders must be HECM borrowers, and the sibling at 55 is below the minimum age of 62

Answer

All individuals on title to the property must be borrowers on the HECM, and all borrowers must be at least 62, so the 55-year-old sibling must either be removed from title or wait.

Question 5

A CRMP is assessing a client in a state with a homestead exemption that limits the ability to place a lien on the property. What step should be taken?

Accepted Answer

Consult with a title attorney to ensure the state's homestead laws allow a valid first-lien HECM to be recorded

Answer

State homestead laws vary and can complicate lien placement; legal review is necessary to confirm the HECM lien can be properly recorded and enforced.

(CRMP) Certified Reverse Mortgage Professional Practice Test

(CRMP) Certified Reverse Mortgage Professional Practice Test

CRMP Client Assessment and Eligibility 5