CRMP Loan Disbursement Options and Payment Plans

Question 1

Which HECM disbursement option provides equal monthly payments to the borrower for as long as they occupy the home as their primary residence?

Accepted Answer

Tenure payment plan

Answer

The tenure payment plan provides equal monthly payments for as long as the borrower occupies the home as their primary residence, with no defined end date.

Question 2

Under HUD's initial disbursement limit rule, what is the maximum percentage of the available principal limit a borrower may typically draw during the first 12 months?

Accepted Answer

60%

Answer

HUD regulations limit borrowers to drawing no more than 60% of their available principal limit during the first 12 months, or mandatory obligations plus 10%, whichever is greater.

Question 3

A borrower selects a HECM adjustable-rate line of credit and makes no draws for several years. What happens to the unused portion of the line of credit over time?

Accepted Answer

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

Answer

The unused portion of a HECM line of credit grows at the loan's interest rate plus the annual MIP rate, increasing the borrower's available funds over time.

Question 4

Which HECM disbursement option is ONLY available with a fixed interest rate product?

Accepted Answer

Single lump sum disbursement

Answer

The single lump sum disbursement is the only option available with fixed-rate HECMs; all other disbursement options require an adjustable-rate HECM.

Question 5

A borrower selects a 'modified tenure' payment plan. What two components does this option combine?

Accepted Answer

A line of credit set-aside with monthly tenure payments

Answer

A modified tenure plan combines a line of credit set-aside with monthly tenure payments, giving the borrower both a reserve amount and regular lifetime monthly disbursements.

(CRMP) Certified Reverse Mortgage Professional Practice Test

(CRMP) Certified Reverse Mortgage Professional Practice Test

CRMP Loan Disbursement Options and Payment Plans