CRMP HECM Program and Products 2

Question 1

Under the HECM program, what is the maximum loan-to-value ratio typically available to a 62-year-old borrower compared to an 80-year-old borrower?

Accepted Answer

The 80-year-old receives a higher PLF than the 62-year-old

Answer

They receive the same PLF regardless of age

Answer

The 62-year-old receives a higher PLF than the 80-year-old

Answer

PLF is determined solely by the property value, not age

Question 2

Which HECM product feature allows borrowers to receive a fixed monthly payment for as long as they occupy the home as their principal residence?

Accepted Answer

Tenure payment plan

Answer

Term payment plan

Answer

Modified term plan

Answer

Line of credit plan

Question 3

What happens to the unused portion of a HECM line of credit over time?

Accepted Answer

It grows at the same rate as the loan's interest rate plus MIP

Answer

It decreases as the loan balance grows

Answer

It remains static throughout the loan term

Answer

It is forfeited after 10 years of non-use

Question 4

A HECM borrower passes away and leaves the home to an adult child who does not wish to sell. What is the maximum amount the heir must pay to keep the home?

Accepted Answer

95% of the current appraised value

Answer

The full appraised value of the property

Answer

The outstanding loan balance including accrued interest

Answer

The original loan amount plus 10% penalty

Question 5

Which scenario would trigger an immediate due-and-payable event on a HECM loan?

Accepted Answer

The last surviving borrower moves to an assisted living facility for 12 consecutive months

Answer

The borrower travels abroad for 8 months

Answer

The borrower fails to pay property taxes for 90 days

Answer

The borrower refinances their homeowners insurance policy

Question 6

Under the HECM for Purchase program, what is the primary source of funds the borrower must bring to closing?

Accepted Answer

Personal funds from savings, retirement accounts, or sale of existing home

Answer

A conventional mortgage combined with HECM proceeds

Answer

A bridge loan secured against the new property

Answer

Gift funds from family members only

Question 7

What is the role of the Expected Average Mortgage Interest Rate (EAMIR) in HECM calculations?

Accepted Answer

It is used to calculate the Principal Limit Factor from HUD tables

Answer

It determines the monthly servicing fee charged to the borrower

Answer

It sets the maximum note rate the lender may charge

Answer

It determines the amount of upfront MIP owed at closing