CRMP Counseling Protocols & Client Communication 4 — Questions and Answers
Question 1: A HECM counselor learns that a client is under pressure from a family member to take out a reverse mortgage. The MOST appropriate action is to:
- Refuse to complete the session and report the family member to authorities
- Complete the counseling normally since family input is always appropriate
- Ensure the client has the opportunity to speak privately and understands they can proceed independently (Correct answer)
- Advise the client to add the family member as a co-borrower to align interests
Correct answer: Ensure the client has the opportunity to speak privately and understands they can proceed independently
Counselors should create space for clients to express concerns privately and confirm that the decision to proceed is voluntary and informed.
Question 2: The Financial Interview, required as part of HECM counseling, is used primarily to:
- Determine whether the client qualifies financially for the HECM program
- Help the counselor understand the client's financial situation and identify alternatives that may better serve their needs (Correct answer)
- Collect income documentation for the lender's underwriting file
- Assess whether the client will be able to pay property taxes and insurance after closing
Correct answer: Help the counselor understand the client's financial situation and identify alternatives that may better serve their needs
The financial interview helps the counselor tailor the session by understanding the client's financial context and identifying whether other options may be more appropriate.
Question 3: Which of the following best describes the counselor's obligation regarding elder financial exploitation?
- Counselors have no legal obligation to report suspected exploitation
- Counselors should note concerns in the file but take no external action
- Counselors should be aware of signs of exploitation and follow applicable state mandatory reporting laws (Correct answer)
- Only licensed social workers can report suspected financial exploitation
Correct answer: Counselors should be aware of signs of exploitation and follow applicable state mandatory reporting laws
HECM counselors must be trained to recognize signs of elder financial exploitation and comply with their state's mandatory reporting requirements where applicable.
Question 4: A client asks the HECM counselor to recommend the best lender for their situation. The counselor should:
- Provide a ranked list of lenders based on current interest rates
- Decline to recommend specific lenders and explain that selecting a lender is the borrower's decision (Correct answer)
- Refer the client back to the lender who initiated the counseling referral
- Suggest the client use HUD's lender search tool and compare at least three offers
Correct answer: Decline to recommend specific lenders and explain that selecting a lender is the borrower's decision
Counselors maintain neutrality by not endorsing specific lenders, though they may educate clients on how to shop for and compare reverse mortgage offers.
Question 5: What information must the counselor confirm the client understands before issuing the HECM counseling certificate?
- The client's credit score meets minimum FHA requirements
- The client comprehends how the loan works, its costs, alternatives, and their rights and obligations (Correct answer)
- The client has selected a specific HECM disbursement method
- The lender has verified the property meets FHA appraisal standards
Correct answer: The client comprehends how the loan works, its costs, alternatives, and their rights and obligations
Before issuing the certificate, the counselor must confirm the client has an adequate understanding of HECM mechanics, costs, implications, and available alternatives.
Question 6: A client who is deaf requests in-person counseling with a sign language interpreter they will provide. The agency should:
- Decline and refer the client to telephone counseling as the only accessible option
- Accommodate the request, ensuring the interpreter does not have a conflict of interest (Correct answer)
- Require the client to use the agency's own certified interpreter only
- Provide written materials only, as interpreters create liability issues
Correct answer: Accommodate the request, ensuring the interpreter does not have a conflict of interest
Agencies must make reasonable accommodations for clients with disabilities, and a client-provided interpreter is acceptable provided there is no conflict of interest.
Question 7: During a HECM counseling session, a client asks about the TALC (Total Annual Loan Cost) rate. The counselor should explain that the TALC rate:
- Replaces the APR calculation for reverse mortgage disclosure purposes and shows total cost as a percentage over the expected loan term (Correct answer)
- Represents only the interest cost of the loan, excluding mortgage insurance premiums
- Is a fixed rate set by HUD that applies to all HECM loans equally
- Measures the borrower's equity growth rate over the life of the loan
Correct answer: Replaces the APR calculation for reverse mortgage disclosure purposes and shows total cost as a percentage over the expected loan term
The TALC rate is a standardized disclosure metric for reverse mortgages that expresses total loan costs—including interest, MIP, and fees—as a single annualized percentage.
CRMP Counseling Protocols & Client Communication 4
A HECM counselor learns that a client is under pressure from a family member to take out a reverse mortgage.
The MOST appropriate action is to: