CRMP Reverse Mortgage Products & Loan Origination 5

Question 1

What is the maximum origination fee a lender can charge on a HECM with a home value of $400,000?

Accepted Answer

$6,000

Answer

HECM origination fees are capped at $6,000, calculated as the greater of $2,500 or 2% of the first $200,000 plus 1% of the remainder, not to exceed $6,000.

Question 2

Under a HECM modified tenure plan, what does the borrower receive compared to a standard tenure plan?

Accepted Answer

A combination of monthly payments plus a line of credit

Answer

Modified tenure combines ongoing monthly tenure payments with a reserved line of credit, splitting the Principal Limit between the two disbursement types.

Question 3

Which statement about the HECM for Purchase right of rescission is correct?

Accepted Answer

There is no right of rescission on a HECM for Purchase of a primary residence

Answer

HECM for Purchase transactions are purchase money mortgages and therefore do not carry the standard 3-day right of rescission that refinances do.

Question 4

A HECM servicer must notify the borrower of a due-and-payable event and allow how many days for the heirs to satisfy or sell the property?

Accepted Answer

6 months, with possible extensions up to 12 months

Answer

After a due-and-payable notice, heirs typically have 6 months to sell or refinance, with FHA allowing extensions up to 12 months total.

Question 5

A HECM borrower's home sells for less than the outstanding loan balance. What protects the borrower's heirs from owing the deficiency?

Accepted Answer

FHA's mutual mortgage insurance fund, making HECMs non-recourse loans

Answer

HECMs are non-recourse loans insured by FHA, so heirs never owe more than the home's appraised value or sale price.

(CRMP) Certified Reverse Mortgage Professional Practice Test

(CRMP) Certified Reverse Mortgage Professional Practice Test

CRMP Reverse Mortgage Products & Loan Origination 5