CRMP Regulatory Compliance & Ethical Practices 5

Question 1

Under NRMLA's ethical guidelines, which advertising practice for reverse mortgages is specifically prohibited?

Accepted Answer

Using celebrity endorsements without disclosing they are paid spokespeople

Answer

NRMLA ethics and FTC rules require that paid endorsements be clearly disclosed; implying a celebrity personally uses or independently endorses the product without disclosure is deceptive.

Question 2

A HECM borrower wants to add a new co-borrower after loan origination. What is the correct response?

Accepted Answer

Explain that co-borrowers cannot be added after origination; a new loan would be required

Answer

HECM program rules do not permit adding co-borrowers to an existing loan; the original loan would need to be refinanced with both parties as borrowers.

Question 3

Which federal agency oversees the HUD-approved housing counseling agencies that provide mandatory HECM counseling?

Accepted Answer

HUD's Office of Housing Counseling

Answer

HUD's Office of Housing Counseling administers the approval and oversight of agencies that provide mandatory pre-loan counseling for HECM borrowers.

Question 4

Under the Gramm-Leach-Bliley Act (GLBA), HECM lenders are required to:

Accepted Answer

Provide borrowers a privacy notice explaining how their personal financial information is shared

Answer

GLBA requires financial institutions, including HECM lenders, to provide customers with a privacy notice describing their information-sharing practices and opt-out rights.

Question 5

If a HECM servicer discovers the borrower has vacated the property for more than 12 consecutive months, what must the servicer do?

Accepted Answer

Call the loan due and payable and begin the foreclosure process if the borrower does not cure

Answer

Under HUD guidelines, a borrower's failure to occupy the property as their principal residence for more than 12 consecutive months triggers a due-and-payable condition.

(CRMP) Certified Reverse Mortgage Professional Practice Test

(CRMP) Certified Reverse Mortgage Professional Practice Test

CRMP Regulatory Compliance & Ethical Practices 5