CRMP Loan Disbursement Options and Payment Plans 2

Question 1

A HECM borrower currently on a line of credit wishes to switch to a tenure payment plan. What is the correct procedure?

Accepted Answer

Request a payment plan change through their loan servicer

Answer

Apply for an entirely new HECM loan

Answer

Obtain new HUD-approved counseling before the change is permitted

Answer

Obtain a new property appraisal to confirm continued eligibility

Question 2

Each time a HECM borrower makes a draw from their line of credit, what is the direct financial effect on the loan?

Accepted Answer

The outstanding loan balance increases by the draw amount

Answer

The outstanding loan balance decreases by the draw amount

Answer

The principal limit increases to offset the draw

Answer

The draw is recorded as a credit with no immediate balance impact

Question 3

How does the servicer calculate the monthly tenure payment amount for an eligible HECM borrower?

Accepted Answer

Using the remaining principal limit and current interest rate, assuming the youngest borrower lives to age 100

Answer

Using the borrower's age at origination as the sole factor

Answer

Using a fixed percentage of the original appraised value divided by 12 months

Answer

Using a standardized HUD table based on loan balance only

Question 4

What is the primary advantage of a tenure payment plan compared to a term payment plan for a borrower concerned about longevity risk?

Accepted Answer

Tenure payments continue for as long as the borrower lives in the home, regardless of how long that is

Answer

Tenure plans always produce higher monthly payment amounts

Answer

Tenure plans allow the unused line of credit to grow tax-free

Answer

Tenure plans carry lower interest rates than term plans

Question 5

Under what specific condition may a HECM borrower draw more than 60% of their principal limit in the first 12 months?

Accepted Answer

If mandatory obligations plus 10% of the principal limit exceed the 60% threshold

Answer

If the borrower is age 80 or older at origination

Answer

If the borrower selects a fixed-rate HECM product

Answer

If the property appraised value exceeds the HECM lending limit

Question 6

A HECM borrower established a line of credit 10 years ago and has made no draws whatsoever. Compared to the original credit limit, the available credit is most likely:

Accepted Answer

Substantially larger due to the line of credit growth feature

Answer

Forfeited due to non-use over an extended period

Answer

Identical to the original amount established at closing

Answer

Reduced by accrued MIP charges assessed against the credit line

Question 7

A 'modified term' payment plan combines which two disbursement components?

Accepted Answer

Line of credit and term payments

Answer

Lump sum and tenure payments

Answer

Line of credit and tenure payments

Answer

Lump sum and a line of credit