CRMP Reverse Mortgage Products & Loan Origination

Question 1

What is a key feature of a reverse mortgage product?

Accepted Answer

It allows conversion of home equity into cash with no monthly payments

Answer

It requires monthly repayments.

Answer

It increases the homeowner's debt every month.

Answer

It is available to all homeowners regardless of age.

Question 2

Who is eligible for a Home Equity Conversion Mortgage (HECM)?

Accepted Answer

Homeowners aged 62 or older with sufficient home equity

Answer

Homeowners under the age of 50.

Answer

Homeowners with a new mortgage.

Answer

Renters living with family.

Question 3

What is required before a borrower can obtain a reverse mortgage?

Accepted Answer

Completion of counseling with a HUD-approved counselor

Answer

A credit score of over 700.

Answer

An appraisal only.

Answer

Proof of recent employment.

Question 4

What is the role of the loan originator in reverse mortgages?

Accepted Answer

To facilitate and manage the reverse mortgage loan application

Answer

To appraise the property.

Answer

To ensure repayment from the borrower.

Answer

To purchase the home from the borrower.

Question 5

Which of the following is a disbursement option for reverse mortgages?

Accepted Answer

Any combination of lump sum, monthly payments, and line of credit

Answer

Lump sum only.

Answer

Monthly payments only.

Answer

Line of credit only.

Question 6

What happens when the last surviving borrower dies or moves out?

Accepted Answer

The loan becomes due and payable

Answer

The loan continues as is.

Answer

The heirs can continue living there without conditions.

Answer

The government forgives the loan.

Question 7

Which agency insures HECM reverse mortgages?

Accepted Answer

Federal Housing Administration (FHA)

Answer

Federal Reserve

Answer

Freddie Mac

Answer

Consumer Financial Protection Bureau

Question 8

Which condition may make a reverse mortgage unsuitable?

Accepted Answer

The homeowner plans to sell the home within a few years

Answer

The homeowner has no mortgage debt.

Answer

The homeowner is 65 years old.

Answer

The homeowner wants monthly payments.

Question 9

How does a reverse mortgage impact inheritance?

Accepted Answer

Heirs can repay the loan or sell the home to settle the debt

Answer

Heirs automatically receive the full home value.

Answer

The home is transferred to HUD.

Answer

The loan is forgiven upon death.