CRMP CRMP Loan Servicing and Post-Closing Requirements Questions and Answers 2

Question 1

What document must a HECM servicer send annually to notify the borrower that the loan is still active?

Accepted Answer

Annual Occupancy Certification

Answer

Servicers must send an Annual Occupancy Certification to confirm the borrower still occupies the home as their primary residence.

Question 2

Under a HECM tenure payment plan, what happens to monthly payments if the borrower outlives the original loan term estimate?

Accepted Answer

Payments continue for life as long as the borrower occupies the home

Answer

Tenure payments continue for the life of the loan as long as the borrower lives in and maintains the home as their primary residence.

Question 3

What is the primary purpose of a Life Expectancy Set-Aside (LESA) in HECM servicing?

Accepted Answer

To reserve funds to pay future property taxes and insurance

Answer

A LESA reserves a portion of the borrower's available equity to pay future property taxes and homeowner's insurance, preventing default.

Question 4

If a borrower wants to change their HECM payment plan from a line of credit to monthly tenure payments, what must they do?

Accepted Answer

Submit a payment plan change request to the servicer

Answer

Borrowers may request a payment plan change from their servicer without refinancing, subject to current availability of funds.

Question 5

What is the key difference between a full LESA and a partial LESA in HECM underwriting?

Accepted Answer

A full LESA is funded entirely from loan proceeds; a partial LESA requires the borrower to contribute

Answer

A full LESA is funded entirely from loan proceeds when the borrower cannot demonstrate ability to pay charges; a partial LESA requires borrower contributions.

(CRMP) Certified Reverse Mortgage Professional Practice Test

(CRMP) Certified Reverse Mortgage Professional Practice Test

CRMP CRMP Loan Servicing and Post-Closing Requirements Questions and Answers 2