HUD HOUSING COUNSELOR ACTUAL TEST PAPER
QUESTIONS AND ANSWERS FIRM A+
✔✔TILA - RESPA Integrated Disclosure Rule (TRID) overview - ✔✔-Law amending
regulations under the Real State settlement + Producers Act (PRESMA)
-Requires easier -to -use mortgage disclosure forms that clearly outline the terms of a
mortgage to the borrower and provide detailed explanations about how the forms should
be completed and used
✔✔Services Evaluations + Explanations requirements - ✔✔-Must be able to tell
homeowners the circumstances lender which the services may make a referral to
foreclosure
-Required to evaluate the borrower for all the foreclosure avoidance options for which
the borrower may qualify
-Must give specific reasons for denying loan modification option
✔✔Services contact requirements (for foreclosures) - ✔✔-Services must make efforts to
contact the borrower after 36 days delinquent
-Services must efforts to contact the borrower must send borrower written notice before
45 days of delinquency + provide info for housing counseling counselors
-Info on risks of delinquency
-Updates of foreclosure proceedings
-Contact info for housing counseling
-Info about loss mitigation
✔✔Judicial Foreclosure - ✔✔-Lawsuit-Process Formalized
-Service issues homeowner a notice of the lawsuit (summons)
-If contested, services +homeowner go before a judge + present arguments
-Judge can order trial
Service can't take action until judge rules
-If not cured, auction sale scheduled
✔✔Non-Judicial Foreclosure - ✔✔-Courts not involved-communication occurs between
homeowner + services
-In most states, services issues a notice of Default (NOD)
-If delinquency not cured, homeowner receives notice of sale (NOS) 90 days after NOD
Gives homeowner 5-10 days before sale date to cure the delinquency
-Once period for reinstatement ends, service schedules sale
-Auction sale
✔✔Options to reduce financial burden of foreclosure - ✔✔Financial assistance to use
for relocation costs
-Tax relief from paying taxes on the banks losses in the foreclosure
-Can request the option for a deficiency judgments be removed
,✔✔FHA Loss Mitigation options - ✔✔1. Attempt to bring the mortgage current
2. Determine eligibility for informal + formal forbearance plans
3. Determine eligibility for special forbearance unemployment
4. Determine eligibility for a loan modification
5. Determine eligibility for FHA HAMP
6. Coinsider a decd-in-lieu
7. Consider a decd-in-lieu
✔✔Service Members Civil Release Act - ✔✔Projects military personnel and their
dependents in issues related to housing, including certain protections against default
judgments, foreclosure + eviction
✔✔Loan Acceleration - ✔✔-Process of accelerating the payments of the full loan
balance
-Once a homeowner is in default for a certain period of time, a clause in many
promissory notes allows lenders to demand immediate payment of remaining loan
balance
✔✔CFPB New Mortgage Rules (January 10, 2014) - ✔✔-Requires lenders to determine
whether mortgage are actually affordable + be transparent
-Restricts dual tracking
-Must provide alternatives, single application process, prompt + fair review
-Cannot begin proceedings until mortgage more than 120 days delinquent
-Makes easier for borrowers to understand terms of their loans
-Expands which loans are protected by HUEPA
✔✔Extended Time to Secure Housing - ✔✔-Clients who select short sale or deed-in-
Lieu rather than foreclosure have more time to secure their next housing arrangement
✔✔Forbearance Qualification Criteria - ✔✔Arreages = # of months for payments
0.85 x surplus income
✔✔FHA Disposition option: Short sale - ✔✔-No deficiency judgement
-Receive up to $1,000 in financial assistance
-Property must be owner-occupied
-Must be 31 days or more delinquent
-Must provide documentation about reduction
-In come or increase in living expense
-Must meet requirements for acceptable sales price + # of days on market
✔✔FHA Loan modification eligibility - ✔✔_Must be 62 days delinquent
-Cannot be in foreclosure
-At least 12 month since loan origination
-Cannot have received loan modification within 24 month
-Must demonstrate financial hardship
,-Default due to - expenses -or income
-Be currently employed
-Chow Surplus income over minimum
-Complete 3 month trial payment plan
-Not have another FHA mortgage
✔✔Partial Claim - ✔✔-File claim form FHA insurance to bring loan current
-Allows homeowners to modify FHA insured mortgages to reduce monthly mortgage
payments
-Up to 30% of unpaid principal balance combined w/loan modification
✔✔FHA -HAMP Eligibility - ✔✔Based on:
-Only one FHA-HAMP within 24 month period
-Whether eligible for other FHA options
-Partial claim amount
Must:
-Default due to verifiable loss of income or increase in living expenses
-Be currently employed
-Snow surplus income under certain limit
✔✔FHA Disposition options: Deed-in-Lieu - ✔✔-Voluntarily sign house over to lender
-Up up $2000 in financial assistance
-Must be owner occupied
-31 days delinquent
-Documentation stating financial hardship
-Lender will develop written deed-in-Lieu
-Foreclosure agreement, signed by both borrower + lender
✔✔State Transition Assistance Programs Eligibility - ✔✔-Used in conjunction w/short
sale + deed in Lieu programs to help homeowners make smooth transition
-low-moderate income based on county in which homeowner resides
-Complete + Sing a hardship affidavit/ 3rd party authorization to document hardship
-Military service financial hardship eligible
-Cannot be in active bankruptcy
✔✔FHA - HAMP - ✔✔-Assists borrowers who are struggling to make mortgage
payments b/c they are no longer FHA options
-May combine a loan modification and partial claim to bring the mortgage current
✔✔FHA Loan Modification - ✔✔-Assist borrowers who are struggling to make mortgage
payments b/c no longer affordable
-Reduce mortgage payment by the greater of $100 or 10% of the original monthly
amount
✔✔FHA Special Forbearance Unemployment - ✔✔-To assist unemployed borrowers
, -Suspends Morgage payments or allows for partial payments while borrower
unemployed, up to 12 month
-Must be at least 3-month delinquent
-Max arrearage no more than 12-month PITI
-The borrower must be unemployed + actively seeking employment
-Provide letter proving previous missed mortgage payments
✔✔Difference between format + informal forbearance - ✔✔-Informal - verbal lasting less
than 3 month
-Formal - written lasting 3-6 month
Only portions available for deling w/o verificable loss of income or - living expenses
✔✔Home Affordable unemployment (UP) - ✔✔-Assist eligible unemployed homeowners
-Reduce mortgage payments to 31% of income or suspends altogether for 12 months or
more
-Eligibility
-Based on date mortgage obtained and amount owned
-The borrower must be unemployed and eligible for UE benefit. Live in residence, not
previously received HAMP
✔✔Second Liem Modification Program (2MP) - ✔✔Assists homeowners whose 1st. The
mortgage was permanently modified under HAMP + who have 2nd. Mortgage on the
same property
-Works in tandem w/HAMP to increase long-term affordability + sustainability
-Eligibility
-1st Mortgage must be modified under HAMP
-Must make timely payments on HAMP modification
✔✔Principal Reduction Alternative (PRA) - ✔✔-To assist homeowners whose home is
currently worth significantly less than the amount owed
-Encourages services to reduce the amount owed
-Eligibility based on date Mortgage obtained, the amount owed, must be Fannie Mae or
Freddie Mac borrower must one more than home worth, occupy the home as a primary
residence, demonstrate financial hardship, be delinquent have to mortgage payment
more than 31% of GMI, document sufficient income to support modified payment
✔✔Loss Mitigation Submission Process (8) - ✔✔1. Determine reason behind on
Mortgage payments
2.Determine if wants to stay in the home or leave
3. Determine the type of loan to determine options through services
4.Gather financial documentation + determine affordability
5.Complete forms to request loss mitigation
6.Submit a request to services
7.Respond to additional request
8. If approved, discuss affordability, if denied, determine why
QUESTIONS AND ANSWERS FIRM A+
✔✔TILA - RESPA Integrated Disclosure Rule (TRID) overview - ✔✔-Law amending
regulations under the Real State settlement + Producers Act (PRESMA)
-Requires easier -to -use mortgage disclosure forms that clearly outline the terms of a
mortgage to the borrower and provide detailed explanations about how the forms should
be completed and used
✔✔Services Evaluations + Explanations requirements - ✔✔-Must be able to tell
homeowners the circumstances lender which the services may make a referral to
foreclosure
-Required to evaluate the borrower for all the foreclosure avoidance options for which
the borrower may qualify
-Must give specific reasons for denying loan modification option
✔✔Services contact requirements (for foreclosures) - ✔✔-Services must make efforts to
contact the borrower after 36 days delinquent
-Services must efforts to contact the borrower must send borrower written notice before
45 days of delinquency + provide info for housing counseling counselors
-Info on risks of delinquency
-Updates of foreclosure proceedings
-Contact info for housing counseling
-Info about loss mitigation
✔✔Judicial Foreclosure - ✔✔-Lawsuit-Process Formalized
-Service issues homeowner a notice of the lawsuit (summons)
-If contested, services +homeowner go before a judge + present arguments
-Judge can order trial
Service can't take action until judge rules
-If not cured, auction sale scheduled
✔✔Non-Judicial Foreclosure - ✔✔-Courts not involved-communication occurs between
homeowner + services
-In most states, services issues a notice of Default (NOD)
-If delinquency not cured, homeowner receives notice of sale (NOS) 90 days after NOD
Gives homeowner 5-10 days before sale date to cure the delinquency
-Once period for reinstatement ends, service schedules sale
-Auction sale
✔✔Options to reduce financial burden of foreclosure - ✔✔Financial assistance to use
for relocation costs
-Tax relief from paying taxes on the banks losses in the foreclosure
-Can request the option for a deficiency judgments be removed
,✔✔FHA Loss Mitigation options - ✔✔1. Attempt to bring the mortgage current
2. Determine eligibility for informal + formal forbearance plans
3. Determine eligibility for special forbearance unemployment
4. Determine eligibility for a loan modification
5. Determine eligibility for FHA HAMP
6. Coinsider a decd-in-lieu
7. Consider a decd-in-lieu
✔✔Service Members Civil Release Act - ✔✔Projects military personnel and their
dependents in issues related to housing, including certain protections against default
judgments, foreclosure + eviction
✔✔Loan Acceleration - ✔✔-Process of accelerating the payments of the full loan
balance
-Once a homeowner is in default for a certain period of time, a clause in many
promissory notes allows lenders to demand immediate payment of remaining loan
balance
✔✔CFPB New Mortgage Rules (January 10, 2014) - ✔✔-Requires lenders to determine
whether mortgage are actually affordable + be transparent
-Restricts dual tracking
-Must provide alternatives, single application process, prompt + fair review
-Cannot begin proceedings until mortgage more than 120 days delinquent
-Makes easier for borrowers to understand terms of their loans
-Expands which loans are protected by HUEPA
✔✔Extended Time to Secure Housing - ✔✔-Clients who select short sale or deed-in-
Lieu rather than foreclosure have more time to secure their next housing arrangement
✔✔Forbearance Qualification Criteria - ✔✔Arreages = # of months for payments
0.85 x surplus income
✔✔FHA Disposition option: Short sale - ✔✔-No deficiency judgement
-Receive up to $1,000 in financial assistance
-Property must be owner-occupied
-Must be 31 days or more delinquent
-Must provide documentation about reduction
-In come or increase in living expense
-Must meet requirements for acceptable sales price + # of days on market
✔✔FHA Loan modification eligibility - ✔✔_Must be 62 days delinquent
-Cannot be in foreclosure
-At least 12 month since loan origination
-Cannot have received loan modification within 24 month
-Must demonstrate financial hardship
,-Default due to - expenses -or income
-Be currently employed
-Chow Surplus income over minimum
-Complete 3 month trial payment plan
-Not have another FHA mortgage
✔✔Partial Claim - ✔✔-File claim form FHA insurance to bring loan current
-Allows homeowners to modify FHA insured mortgages to reduce monthly mortgage
payments
-Up to 30% of unpaid principal balance combined w/loan modification
✔✔FHA -HAMP Eligibility - ✔✔Based on:
-Only one FHA-HAMP within 24 month period
-Whether eligible for other FHA options
-Partial claim amount
Must:
-Default due to verifiable loss of income or increase in living expenses
-Be currently employed
-Snow surplus income under certain limit
✔✔FHA Disposition options: Deed-in-Lieu - ✔✔-Voluntarily sign house over to lender
-Up up $2000 in financial assistance
-Must be owner occupied
-31 days delinquent
-Documentation stating financial hardship
-Lender will develop written deed-in-Lieu
-Foreclosure agreement, signed by both borrower + lender
✔✔State Transition Assistance Programs Eligibility - ✔✔-Used in conjunction w/short
sale + deed in Lieu programs to help homeowners make smooth transition
-low-moderate income based on county in which homeowner resides
-Complete + Sing a hardship affidavit/ 3rd party authorization to document hardship
-Military service financial hardship eligible
-Cannot be in active bankruptcy
✔✔FHA - HAMP - ✔✔-Assists borrowers who are struggling to make mortgage
payments b/c they are no longer FHA options
-May combine a loan modification and partial claim to bring the mortgage current
✔✔FHA Loan Modification - ✔✔-Assist borrowers who are struggling to make mortgage
payments b/c no longer affordable
-Reduce mortgage payment by the greater of $100 or 10% of the original monthly
amount
✔✔FHA Special Forbearance Unemployment - ✔✔-To assist unemployed borrowers
, -Suspends Morgage payments or allows for partial payments while borrower
unemployed, up to 12 month
-Must be at least 3-month delinquent
-Max arrearage no more than 12-month PITI
-The borrower must be unemployed + actively seeking employment
-Provide letter proving previous missed mortgage payments
✔✔Difference between format + informal forbearance - ✔✔-Informal - verbal lasting less
than 3 month
-Formal - written lasting 3-6 month
Only portions available for deling w/o verificable loss of income or - living expenses
✔✔Home Affordable unemployment (UP) - ✔✔-Assist eligible unemployed homeowners
-Reduce mortgage payments to 31% of income or suspends altogether for 12 months or
more
-Eligibility
-Based on date mortgage obtained and amount owned
-The borrower must be unemployed and eligible for UE benefit. Live in residence, not
previously received HAMP
✔✔Second Liem Modification Program (2MP) - ✔✔Assists homeowners whose 1st. The
mortgage was permanently modified under HAMP + who have 2nd. Mortgage on the
same property
-Works in tandem w/HAMP to increase long-term affordability + sustainability
-Eligibility
-1st Mortgage must be modified under HAMP
-Must make timely payments on HAMP modification
✔✔Principal Reduction Alternative (PRA) - ✔✔-To assist homeowners whose home is
currently worth significantly less than the amount owed
-Encourages services to reduce the amount owed
-Eligibility based on date Mortgage obtained, the amount owed, must be Fannie Mae or
Freddie Mac borrower must one more than home worth, occupy the home as a primary
residence, demonstrate financial hardship, be delinquent have to mortgage payment
more than 31% of GMI, document sufficient income to support modified payment
✔✔Loss Mitigation Submission Process (8) - ✔✔1. Determine reason behind on
Mortgage payments
2.Determine if wants to stay in the home or leave
3. Determine the type of loan to determine options through services
4.Gather financial documentation + determine affordability
5.Complete forms to request loss mitigation
6.Submit a request to services
7.Respond to additional request
8. If approved, discuss affordability, if denied, determine why
