CRMP Financial Assessment and Underwriting 2

Question 1

During a HECM financial assessment, a borrower has a monthly residual income of $450.
The required residual income threshold for a household of two in a non-Northeast region is $529.
What must the lender do?

Accepted Answer

Require a Life Expectancy Set-Aside (LESA)

Answer

Deny the loan outright

Answer

Waive the shortfall if the borrower has good credit

Answer

Approve without condition since the gap is less than $100

Question 2

Which of the following credit events during the financial assessment would typically require a satisfactory explanation letter but would NOT automatically disqualify a borrower?

Accepted Answer

Medical-related derogatory credit

Answer

Active Chapter 7 bankruptcy

Answer

Unpaid federal tax lien

Answer

Delinquent FHA-insured mortgage in the past 12 months

Question 3

For HECM financial assessment purposes, how far back must the lender review a borrower's housing payment history?

Accepted Answer

24 months

Answer

12 months

Answer

36 months

Answer

48 months

Question 4

A borrower receives Social Security income of $1,800/month and part-time wages of $600/month. The part-time income has been received for only 14 months. How should the lender treat the part-time wages?

Accepted Answer

Exclude the wages because 24 months of history is required

Answer

Include the full $600 since any income counts

Answer

Include only 50% of the wages

Answer

Average the wages over 14 months and include that figure

Question 5

A Fully-Funded LESA differs from a Partially-Funded LESA in that the Fully-Funded LESA:

Accepted Answer

Is funded entirely by loan proceeds upfront to pay all future property charges

Answer

Covers only insurance premiums, not taxes

Answer

Requires the borrower to contribute monthly deposits

Answer

Is only available for borrowers under age 72

Question 6

When assessing a borrower's cash flow, which of the following recurring obligations is NOT typically included as a monthly liability?

Accepted Answer

Utility bills

Answer

Minimum credit card payments

Answer

Car loan payments

Answer

Student loan payments

Question 7

A borrower is in a repayment plan with the IRS for a federal tax debt of $12,000. How should the lender treat this during financial assessment?

Accepted Answer

Count the repayment plan payment as a monthly liability if in good standing

Answer

Disqualify the borrower automatically since federal debt is involved

Answer

Ignore it because a repayment plan resolves the lien

Answer

Require the debt to be paid in full before closing