CRMP Ethics and Counseling Requirements 4

Question 1

A CRMP suspects a borrower has been the victim of a home repair scam where contractor receives HECM proceeds directly. What is the appropriate response?

Accepted Answer

Report the suspected fraud to HUD and recommend the borrower consult an attorney

Answer

Allow the transaction if the borrower consents in writing

Answer

Restructure the loan to pay the contractor in installments

Answer

Refer the borrower to a different lender

Question 2

Under what circumstance may a HECM lender pay for a borrower's HUD-required counseling?

Accepted Answer

Only after the borrower has received the counseling completion certificate

Answer

Never — lender payment for counseling is always prohibited

Answer

At any time, as long as the amount does not exceed the HUD maximum fee

Answer

Only for borrowers below 150% of the federal poverty line

Question 3

A CRMP's primary ethical obligation when advising a senior borrower is to whom?

Accepted Answer

The borrower themselves

Answer

The lender providing the wholesale funding

Answer

The borrower's family members

Answer

HUD and FHA as guarantor

Question 4

Which of the following best describes 'suitability' in the CRMP context?

Accepted Answer

Ensuring the reverse mortgage product genuinely meets the borrower's financial and personal needs

Answer

Confirming the borrower qualifies financially under FHA guidelines

Answer

Verifying the property meets minimum HUD standards

Answer

Determining whether the borrower can pay closing costs

Question 5

Which of the following topics is NOT required to be covered during mandatory HECM counseling?

Accepted Answer

Specific investment advice for loan proceeds

Answer

Loan costs and fee structure

Answer

Alternatives to a reverse mortgage

Answer

Impact on estate and heirs

Question 6

A CRMP is offered a gift worth $200 from a title company seeking reverse mortgage referrals. Under RESPA and NRMLA ethics, this is:

Accepted Answer

Prohibited as it constitutes an illegal kickback

Answer

Acceptable if disclosed to the borrower

Answer

Permissible if the gift is given after closing

Answer

Allowed up to $250 per calendar year

Question 7

When a borrower asks a CRMP to rush the process so counseling happens on the same day as the application signing, the CRMP must explain that:

Accepted Answer

HUD requires a minimum 7-business-day waiting period between counseling and application signing

Answer

Same-day completion is allowed if the borrower waives the waiting period in writing

Answer

The counselor can issue an expedited certificate for an additional fee

Answer

The lender can override the waiting period for financial hardship cases