CRMP Counseling and Disclosures 5

Question 1

Under HUD guidelines, HECM counselors must maintain records of each counseling session for a minimum of how many years?

Accepted Answer

3 years

Answer

HUD requires counseling agencies to retain counseling records, including session notes and certificates, for a minimum of 3 years.

Question 2

Which of the following best describes the purpose of the HECM Financial Interview Tool (FIT) used by counselors?

Accepted Answer

To help counselors assess the borrower's financial situation and ability to meet ongoing loan obligations

Answer

The FIT guides counselors in evaluating whether the borrower can sustain property charges and meet loan obligations after closing.

Question 3

Which disclosure must be provided to HECM borrowers specifically addressing how interest accrues and compounds over the life of the loan?

Accepted Answer

The HECM Important Terms notice included with the Loan Estimate or disclosure packet

Answer

The HECM Important Terms notice explains the mechanics of rising loan balance, compounding interest, and the impact on home equity over time.

Question 4

A potential HECM borrower is currently in bankruptcy proceedings. How should the counselor handle this situation?

Accepted Answer

Complete counseling but note that bankruptcy may affect loan eligibility and advise the borrower to consult an attorney

Answer

Counselors should complete the session, document the bankruptcy status, and advise the borrower to seek legal counsel, as active bankruptcy can affect HECM eligibility.

Question 5

Which type of HECM disclosure must be signed by the borrower and returned to the lender acknowledging receipt of information about loan costs and risks before the application is taken?

Accepted Answer

The Informed Consent Acknowledgment or Anti-Steering Disclosure

Answer

Lenders must obtain signed acknowledgments confirming the borrower received required disclosures about costs and risks prior to proceeding with the application.

(CRMP) Certified Reverse Mortgage Professional Practice Test

(CRMP) Certified Reverse Mortgage Professional Practice Test

CRMP Counseling and Disclosures 5