CRMP Counseling Protocols & Client Communication 2 — Questions and Answers
Question 1: Under HUD guidelines, how long must a borrower wait after receiving HECM counseling before signing loan documents?
- There is no mandatory waiting period
- At least 3 business days
- At least 7 calendar days (Correct answer)
- At least 10 business days
Correct answer: At least 7 calendar days
HUD requires borrowers to wait at least 7 calendar days after counseling before signing HECM loan documents, ensuring time for reflection.
Question 2: When a HECM counselor identifies that a client may have diminished cognitive capacity, the BEST first step is to:
- Immediately terminate the session and refer to adult protective services
- Proceed normally since cognitive screening is outside the counselor's scope
- Suggest the client bring a trusted advisor or family member to a follow-up session (Correct answer)
- Deny counseling until the client provides a physician's clearance letter
Correct answer: Suggest the client bring a trusted advisor or family member to a follow-up session
Counselors should recommend that clients with potential cognitive concerns bring a trusted third party to help ensure they understand the loan terms.
Question 3: A reverse mortgage counselor must provide the client with a written summary of the counseling session that includes which of the following?
- A specific loan recommendation from the lender
- The counselor's personal opinion on whether the client should proceed
- Contact information for the counseling agency and a summary of alternatives discussed (Correct answer)
- A guarantee that the client qualifies for a HECM
Correct answer: Contact information for the counseling agency and a summary of alternatives discussed
The written counseling summary must include agency contact information, topics covered, and alternatives to a reverse mortgage that were discussed.
Question 4: Which statement best describes the role of a HUD-approved HECM counselor?
- To act as the client's loan officer and help select the best HECM product
- To provide independent, unbiased education so the client can make an informed decision (Correct answer)
- To advocate for the client's interests against the lender during negotiations
- To assess the property value and determine loan eligibility
Correct answer: To provide independent, unbiased education so the client can make an informed decision
HUD-approved counselors are neutral educators who help clients understand reverse mortgages without steering them toward or away from any specific product.
Question 5: A borrower requests that counseling be conducted in Spanish. The counselor only speaks English. What should the counselor do?
- Conduct the session in English and provide a Spanish-language pamphlet afterward
- Use the borrower's adult child as an interpreter during the session
- Refer the client to a HUD-approved counselor who can serve them in Spanish (Correct answer)
- Proceed in English since all official HECM documents are in English
Correct answer: Refer the client to a HUD-approved counselor who can serve them in Spanish
Counselors must ensure clients receive counseling in a language they understand, which means referring non-English speakers to appropriately qualified counselors.
Question 6: During counseling, a client discloses that a non-borrowing spouse will remain in the home. What is the counselor's MOST important obligation?
- Advise the client to remove the spouse from the title to simplify the loan
- Explain the protections and limitations for non-borrowing spouses under current HECM rules (Correct answer)
- Recommend the spouse be added as a co-borrower if they are under age 62
- Inform the lender immediately about the non-borrowing spouse's presence
Correct answer: Explain the protections and limitations for non-borrowing spouses under current HECM rules
Counselors must fully explain non-borrowing spouse deferral rights and the conditions under which they can remain in the home after the borrower's death or departure.
Question 7: What is the primary purpose of the mandatory counseling requirement for HECM loans?
- To give lenders an opportunity to pre-screen applicants for creditworthiness
- To ensure borrowers understand the loan's implications and consider all alternatives (Correct answer)
- To satisfy FHA underwriting requirements related to property condition
- To allow HUD to collect demographic data on reverse mortgage applicants
Correct answer: To ensure borrowers understand the loan's implications and consider all alternatives
Mandatory counseling exists to protect consumers by ensuring they are fully informed about how HECMs work and what alternatives may be available.
CRMP Counseling Protocols & Client Communication 2
Under HUD guidelines, how long must a borrower wait after receiving HECM counseling before signing loan documents?