CRMP - Certified Reverse Mortgage Professional Borrower Qualification Requirements Questions and Answers

Question 1

A prospective HECM borrower completed the mandatory counseling session with a HUD-approved counselor. Which of the following statements about this counseling is correct?

Accepted Answer

The counseling session is designed to provide impartial education about the loan's features, costs, and obligations.

Answer

HUD requires all prospective HECM borrowers to complete a counseling session with an independent, HUD-approved counselor. The purpose of this mandatory session is to provide unbiased education, ensuring the borrower fully understands the loan's terms, financial implications, and their responsibilities, such as paying property taxes and insurance. The counselor does not approve or deny the loan, and the borrower must be the one to choose the agency and schedule the appointment to maintain impartiality.

Question 2

During the Financial Assessment for a HECM loan, what is the consequence if a borrower is found to have delinquent federal debt?

Accepted Answer

The borrower is automatically disqualified from obtaining a HECM.

Answer

A key eligibility requirement for a HECM is that the borrower must not be delinquent on any federal debt. This includes things like unpaid federal income taxes or defaulted federal student loans. Delinquency on federal debt will render the applicant ineligible for the FHA-insured loan program.

Question 3

A married couple applies for a HECM. The husband is 68, but his wife is 60. How does the wife's age impact their eligibility and the loan terms?

Accepted Answer

The wife can be designated as an 'Eligible Non-Borrowing Spouse', which allows the loan to proceed but affects the principal limit.

Answer

For HECM loans, at least one borrower must be 62 or older. A spouse under 62 can be designated as an 'Eligible Non-Borrowing Spouse' (NBS). This allows the couple to get the HECM. However, the age of the younger, non-borrowing spouse is factored into the calculation of the principal limit, which generally results in a lower loan amount than if both were over 62. This provision protects the NBS, allowing them to remain in the home after the borrowing spouse passes away, provided they meet certain conditions.

Question 4

Which of the following property types is generally INELIGIBLE for an FHA-insured HECM?

Accepted Answer

A cooperative unit (co-op).

Answer

FHA guidelines specify which property types are eligible for a HECM. Eligible properties include single-family homes, 2-4 unit properties with the borrower occupying one unit, and condominiums and manufactured homes that meet specific FHA/HUD approval standards. Cooperative units, where the resident owns shares in a corporation rather than the real property itself, are not eligible for FHA-insured HECMs.

Question 5

A HECM applicant has a history of some late payments on credit cards but has consistently paid their property taxes and homeowners insurance on time. During the Financial Assessment, how is their credit history most likely to be viewed?

Accepted Answer

The lender will focus on the overall pattern of financial management, with special emphasis on property charge payments.

Answer

The HECM Financial Assessment does not have a minimum FICO score requirement. Instead, it involves a holistic review of the borrower's credit history to assess their willingness and ability to meet financial obligations. Lenders place significant weight on the timely payment of property charges (taxes and insurance), as this is a key ongoing responsibility for the borrower. A history of paying these crucial expenses on time is a strong positive factor, and a few other late payments may not disqualify the applicant, especially if there are extenuating circumstances.

(CRMP) Certified Reverse Mortgage Professional Practice Test

(CRMP) Certified Reverse Mortgage Professional Practice Test

CRMP - Certified Reverse Mortgage Professional Borrower Qualification Requirements Questions and Answers