CRMP - Certified Reverse Mortgage Professional Ethics and Counseling Requirements Questions and Answers

Question 1

A Certified Reverse Mortgage Professional (CRMP) is approached by a client who is insistent on using the proceeds of their HECM loan to purchase a specific annuity product recommended by their financial advisor. The CRMP has concerns that this might not be in the client's best interest. According to the NRMLA Code of Ethics, what is the CRMP's primary responsibility?

Accepted Answer

To advise the consumer to seek independent legal, tax, or investment counsel regarding the annuity purchase.

Answer

The NRMLA Code of Ethics, specifically Rule 402, requires members to advise consumers to seek legal, tax, and investment counsel when it appears to be in their best interest. While a CRMP should not provide financial advice they aren't licensed to give, they have an ethical duty to recommend that the client get impartial, expert advice on significant financial decisions related to the loan proceeds. Prohibiting the transaction or simply processing it without comment would be a failure of this ethical duty.

Question 2

During a mandatory HECM counseling session, the HUD-approved counselor must cover several key topics to ensure the borrower's understanding. Which of the following is a topic the counselor is explicitly prohibited from discussing?

Accepted Answer

Steering the borrower toward a specific lender or loan product.

Answer

HUD-approved counselors must remain impartial. Their role is to educate the borrower about how reverse mortgages work, the costs, benefits, and obligations. They are expressly forbidden from steering clients to specific lenders or loan choices, as this would constitute a conflict of interest and undermine the counseling's objectivity. All the other options are required topics of discussion during counseling.

Question 3

A CRMP is designing a new direct mail advertisement. According to NRMLA's ethical advertising standards, which of the following practices is explicitly considered misleading and should be avoided?

Accepted Answer

Using the phrase 'government benefit' or implying the loan is a government program.

Answer

NRMLA has identified a 'Dirty Dozen' of unethical advertising practices, which includes advertising a HECM loan as a 'government loan' or 'benefit'. While HECMs are FHA-insured, they are loans made by private lenders that must be repaid. Describing them as a government benefit is a material misrepresentation. The other options are considered ethical and transparent advertising practices.

Question 4

A prospective borrower completes their mandatory reverse mortgage counseling session but decides to wait a few months before proceeding. How long is the HECM counseling certificate valid for the purpose of applying for a loan?

Accepted Answer

180 days from the date of issuance.

Answer

According to HUD guidelines, a HECM counseling certificate is valid for 180 days from the date it is issued by the counselor. If the loan application is not submitted within this timeframe, the borrower must complete counseling again to receive a new, valid certificate before they can proceed.

Question 5

An elderly client is applying for a reverse mortgage. Their adult child, who holds power of attorney, is heavily involved and pressures the CRMP to expedite the process and disburse funds directly into a joint account they share with the parent. What ethical principle from the CRMP Code of Ethics is most at risk in this scenario?

Accepted Answer

Integrity, by avoiding conduct that could involve deceit or misrepresentation and ensuring the transaction is fair to the client.

Answer

The core issue is ensuring the transaction is free from undue influence and serves the best interest of the borrower. The CRMP Code of Ethics emphasizes integrity, which includes an obligation to avoid misrepresentation, protect the client's interests, and ensure fairness. Rushing the process under pressure and disbursing funds without ensuring the elderly client fully understands and consents could facilitate elder financial abuse, which is a severe breach of integrity.

(CRMP) Certified Reverse Mortgage Professional Practice Test

(CRMP) Certified Reverse Mortgage Professional Practice Test

CRMP - Certified Reverse Mortgage Professional Ethics and Counseling Requirements Questions and Answers