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

Older borrowers receive higher Principal Limit Factors (PLFs) because they have a shorter expected loan term, reducing lender risk.

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

The tenure payment plan provides equal monthly payments for the life of the loan, continuing as long as the borrower lives in the home.

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

The unused HECM line of credit grows at the current note rate plus the ongoing MIP rate, increasing the borrower's available funds over time.

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

Non-borrowing heirs may satisfy a HECM by paying 95% of the current appraised value, even if the loan balance exceeds the home's worth.

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

A HECM becomes due and payable when the last surviving borrower has not occupied the home as a principal residence for 12 consecutive months.

(CRMP) Certified Reverse Mortgage Professional Practice Test

(CRMP) Certified Reverse Mortgage Professional Practice Test

CRMP HECM Program and Products 2