CRMP Counseling and Disclosures 3

Question 1

The Good Faith Estimate (GFE) for a HECM loan must be provided to the borrower within how many business days of receiving a completed loan application?

Accepted Answer

3 business days

Answer

Under RESPA and TILA, lenders must deliver the GFE (now Loan Estimate under TRID) within 3 business days of a completed application.

Question 2

A HECM counselor must document that the borrower was informed about which of the following alternatives to a reverse mortgage?

Accepted Answer

Home equity loans, sale-leaseback arrangements, and government benefit programs

Answer

HUD requires counselors to discuss alternatives such as home equity loans, sale-leaseback, and public benefit programs to ensure the borrower considers all options.

Question 3

Which document must a lender provide to a HECM borrower at least 3 business days before closing that summarizes the loan's key terms and costs?

Accepted Answer

The Closing Disclosure

Answer

Under TRID, lenders must provide the Closing Disclosure at least 3 business days before consummation so borrowers can review final terms.

Question 4

A borrower who is 64 years old applies for a HECM with a 72-year-old co-borrower. How does the younger borrower's age affect the principal limit factor?

Accepted Answer

The younger borrower's age is used, resulting in a lower principal limit

Answer

HUD uses the age of the youngest borrower (or eligible non-borrowing spouse) to set the PLF, which lowers the available proceeds to account for a longer loan term.

Question 5

Which disclosure specifically informs HECM borrowers of their right to rescind (cancel) the loan within three business days of closing?

Accepted Answer

The Notice of Right to Cancel under TILA (Regulation Z)

Answer

TILA's right of rescission under Regulation Z gives borrowers three business days after closing to cancel the transaction without penalty.

(CRMP) Certified Reverse Mortgage Professional Practice Test

(CRMP) Certified Reverse Mortgage Professional Practice Test

CRMP Counseling and Disclosures 3