CRMP HECM Program and Products 5

Question 1

What distinguishes a HECM Standard from a HECM Saver (the historical product distinction before 2017 program changes)?

Accepted Answer

HECM Saver had a lower upfront MIP but offered a reduced Principal Limit

Answer

The HECM Saver charged a minimal upfront MIP (0.01%) but provided a lower Principal Limit, while HECM Standard charged 2% upfront with a higher Principal Limit.

Question 2

A HECM borrower in a modified term payment plan receives monthly payments AND maintains a line of credit. If the borrower draws from the line of credit, what happens to the monthly payments?

Accepted Answer

Monthly payments continue unchanged; only the line of credit balance is reduced

Answer

In a modified term plan, the scheduled monthly payments continue unaffected by line of credit draws; the two components are independent within the available Principal Limit.

Question 3

Which statement accurately describes how property taxes affect HECM eligibility in states with homestead exemptions?

Accepted Answer

Tax deferrals must be subordinated to the HECM lien to proceed

Answer

Property tax deferral programs that create a lien on the property must be subordinated to the HECM first lien to allow the loan to proceed.

Question 4

Under HECM servicing rules, within how many days must the servicer begin foreclosure action after a due-and-payable condition has been established and the grace period has passed?

Accepted Answer

6 months

Answer

Servicers must typically initiate foreclosure within 6 months of the due-and-payable date, with extensions available upon HUD approval.

Question 5

How does the HECM program handle a scenario where two spouses are both listed as borrowers and one moves to a care facility while the other remains in the home?

Accepted Answer

The loan continues as long as at least one borrower still occupies the home as their principal residence

Answer

A HECM is not due and payable until the LAST surviving borrower vacates the property, so one spouse remaining in the home keeps the loan in good standing.

(CRMP) Certified Reverse Mortgage Professional Practice Test

(CRMP) Certified Reverse Mortgage Professional Practice Test

CRMP HECM Program and Products 5