CRMP Ethics and Professional Conduct 3

Question 1

A borrower with early-stage dementia wants to proceed with a reverse mortgage without involving family. What is the most ethical course of action?

Accepted Answer

Assess capacity, consult with a counselor, and consider involving appropriate support parties

Answer

Process the loan immediately to honor the borrower's stated wishes

Answer

Refuse the loan outright because of the diagnosis

Answer

Ask the borrower to sign a capacity waiver and proceed

Question 2

How should a CRMP respond when a borrower asks them to recommend an elder law attorney?

Accepted Answer

Provide a list of qualified attorneys without steering toward one who pays referral fees

Answer

Refuse all attorney referrals to avoid liability

Answer

Recommend the attorney who offers the best referral arrangement

Answer

Tell the borrower attorneys are unnecessary for reverse mortgages

Question 3

What is the primary purpose of the mandatory independent housing counseling required before a HECM loan closes?

Accepted Answer

To ensure borrowers receive unbiased information about the loan and alternatives from an independent source

Answer

To satisfy a lender's insurance requirement

Answer

To allow the lender to verify the borrower's financial literacy

Answer

To generate required documentation for the FHA endorsement file

Question 4

A CRMP discovers that a borrower provided false information on their loan application. What is the appropriate response?

Accepted Answer

Halt the process and address the discrepancy with the borrower and lender per compliance requirements

Answer

Overlook minor discrepancies to help the borrower qualify

Answer

Correct the application on the borrower's behalf without disclosure

Answer

Proceed since the underwriter will catch errors during review

Question 5

Which borrower population characteristic most heightens the ethical obligations of a CRMP?

Accepted Answer

Advanced age, potential cognitive decline, and fixed-income dependence

Answer

High net worth and multiple properties

Answer

Primary residence in a high-cost metropolitan area

Answer

Previous experience with refinancing traditional mortgages

Question 6

A CRMP is asked by their employer to meet a monthly quota by rushing borrowers through the process. What is the ethical response?

Accepted Answer

Maintain proper disclosure and counseling timelines regardless of production pressure

Answer

Meet the quota since employer directives take precedence

Answer

Reduce explanation time while maintaining all required signatures

Answer

Report the quota to borrowers so they can make a faster decision

Question 7

Which action by a CRMP would most directly violate the principle of non-maleficence (do no harm)?

Accepted Answer

Recommending a reverse mortgage to a borrower whose primary goal could be better served by a different product

Answer

Providing a Good Faith Estimate within required timeframes

Answer

Disclosing all lender compensation to the borrower

Answer

Explaining loan terms in plain language