Housing and Mortgage Counseling Flashcards
7 cards from real FICEP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Housing and Mortgage Counseling flashcards as text
A homeowner has a loan-to-value (LTV) ratio of 85% and wants to cancel PMI. What must the LTV reach before the lender is required by law to automatically cancel PMI?
Answer: 78%
Under the Homeowners Protection Act, lenders must automatically cancel PMI when the LTV reaches 78% based on original amortization.
During a post-purchase counseling session, a client mentions they received a notice of escrow shortage. What is the most likely cause?
Answer: Property taxes or homeowners insurance premiums increased
Escrow shortages typically occur when property taxes or insurance premiums rise above what was originally estimated and collected.
A borrower is comparing a 15-year fixed mortgage and a 30-year fixed mortgage for the same loan amount. Which statement is most accurate?
Answer: The 15-year loan will result in significantly less total interest paid
A 15-year mortgage accrues interest over half the time, resulting in dramatically lower total interest cost despite a higher monthly payment.
What is the purpose of the HUD-approved housing counseling agency requirement for certain FHA borrowers?
Answer: To ensure borrowers understand loan terms, rights, and responsibilities
HUD-approved counselors educate borrowers about mortgage obligations, homeownership responsibilities, and available assistance programs.
A client is delinquent on their mortgage and asks about a forbearance agreement. Which best describes what forbearance provides?
Answer: A temporary suspension or reduction of mortgage payments
Forbearance is a temporary agreement allowing the borrower to pause or reduce payments, with the deferred amount typically repaid later.
Under RESPA, within how many business days must a lender provide a Loan Estimate after receiving a completed loan application?
Answer: 3 business days
RESPA requires lenders to deliver the Loan Estimate to applicants within 3 business days of receiving a completed mortgage application.
A counselor is helping a client evaluate a reverse mortgage. Which borrower requirement is mandatory for a HECM reverse mortgage?
Answer: The borrower must be at least 62 years old
HECMs are available only to homeowners aged 62 or older who use the home as their primary residence.