HUD HOUSING COUNSELOR UPDATED EXAMS SCRIPT
QUESTIONS AND ANSWERS FIRM A+
✔✔Which additional information does the housing counselor need to help the client
determine her retention options?
A- Notice of foreclosure
B- Mortgage type
C- Total debt balance
D- Emergency budget - ✔✔B- Mortgage type
✔✔The clients, a married couple, have three credit cards with high balances and make
monthly payments on a cash advance loan. They are worried that their credit scores are
too low -they have a free credit score tracker with one of their credit cards and the
information is not encouraging. Which action would be most likely to have the greatest
positive impact on the clients' credit score?
A- Opening a new secured credit card
B- Paying down their credit card balances
C- Paying off and closing one card
D- Opening a department store charge card - ✔✔Paying down their credit card
balances
✔✔Which is an eligibility factor for the Earned Income Tax Credit?
A- Having a qualifying child
B- Pursuing post-secondary education
C- Filing as head of household
D- Receiving wages - ✔✔D- Receiving wages
✔✔The clients obtained the mortgage in 2006 from a broker who told them that they did
not need any proof of income, savings, or assets. Which instrument was put into
practice after the mortgage crisis in 2008 that changed this for future loans? - ✔✔Ability
to Repay/Qualified Mortgage Rule
✔✔Which is an example of a change enacted by Consumer Finance Protection Bureau
(CFPB) that would help a client prepare for the mortgage loan process?
A- Protection of military personnel and their dependents in issues related to housing of
contact for loss mitigation efforts
B- Penalization of five financial institutions for deceptive lending and foreclosure
practices
C- Requirement for servicers to appoint a single point of contact for loss mitigation
efforts
, D- Easier-to-use mortgage disclosure forms that clearly outline the terms of a mortgage
to the borrower - ✔✔D- Easier-to-use mortgage disclosure forms that clearly outline the
terms of a mortgage to the borrower
✔✔Which satisfies a housing counseling agency's requirement to Affirmatively Further
Fair Housing?
A- Reviewing marketing materials of local mortgage lenders
B- Giving a donation to a homeless shelter
C- Appointing a local lender to the board of directors
D- Creating a hiring policy that encourages diversity in staff - ✔✔A- Reviewing
marketing materials of local mortgage lenders
✔✔Which Affirmatively Furthering Fair Housing action might benefit a client?
A- Settle fair housing complaints on behalf of the client
B- Commence a civil action in an appropriate U.S. district or state court on behalf of the
client
C- Require banks to operate in areas that are underserved
D- Conduct educational initiatives to inform people about fair housing obligations -
✔✔D- Conduct educational initiatives to inform people about fair housing obligations
✔✔The clients tried to apply for a mortgage with a couple of online mortgage providers
but were rejected due to excessive debt. Which should the counselor advise the clients
to do after being rejected for a mortgage loan?
A- File bankruptcy to wipe away their debt.
B- Dispute open accounts with creditors.
C- Pay down debt and keep balances low moving forward.
D- Take out a new loan to increase available credit. - ✔✔C- Pay down debt and keep
balances low moving forward.
✔✔One of the clients' relatives agreed to give them funds for the entire downpayment
on the home. For which
mortgage product did they most likely qualify?
A- VA
B- Conventional
C- USDA
D- FHA - ✔✔D- FHA
NOTE: FHA is the only mortgage loan product that allows family assistance. USDA and
VA do not require down payment, and most conventional loans generally will not allow
funds other than those from the borrower as a down payment.
Reference: Module 2.2 Affordable Housing Options, Page Number 5 to 16
QUESTIONS AND ANSWERS FIRM A+
✔✔Which additional information does the housing counselor need to help the client
determine her retention options?
A- Notice of foreclosure
B- Mortgage type
C- Total debt balance
D- Emergency budget - ✔✔B- Mortgage type
✔✔The clients, a married couple, have three credit cards with high balances and make
monthly payments on a cash advance loan. They are worried that their credit scores are
too low -they have a free credit score tracker with one of their credit cards and the
information is not encouraging. Which action would be most likely to have the greatest
positive impact on the clients' credit score?
A- Opening a new secured credit card
B- Paying down their credit card balances
C- Paying off and closing one card
D- Opening a department store charge card - ✔✔Paying down their credit card
balances
✔✔Which is an eligibility factor for the Earned Income Tax Credit?
A- Having a qualifying child
B- Pursuing post-secondary education
C- Filing as head of household
D- Receiving wages - ✔✔D- Receiving wages
✔✔The clients obtained the mortgage in 2006 from a broker who told them that they did
not need any proof of income, savings, or assets. Which instrument was put into
practice after the mortgage crisis in 2008 that changed this for future loans? - ✔✔Ability
to Repay/Qualified Mortgage Rule
✔✔Which is an example of a change enacted by Consumer Finance Protection Bureau
(CFPB) that would help a client prepare for the mortgage loan process?
A- Protection of military personnel and their dependents in issues related to housing of
contact for loss mitigation efforts
B- Penalization of five financial institutions for deceptive lending and foreclosure
practices
C- Requirement for servicers to appoint a single point of contact for loss mitigation
efforts
, D- Easier-to-use mortgage disclosure forms that clearly outline the terms of a mortgage
to the borrower - ✔✔D- Easier-to-use mortgage disclosure forms that clearly outline the
terms of a mortgage to the borrower
✔✔Which satisfies a housing counseling agency's requirement to Affirmatively Further
Fair Housing?
A- Reviewing marketing materials of local mortgage lenders
B- Giving a donation to a homeless shelter
C- Appointing a local lender to the board of directors
D- Creating a hiring policy that encourages diversity in staff - ✔✔A- Reviewing
marketing materials of local mortgage lenders
✔✔Which Affirmatively Furthering Fair Housing action might benefit a client?
A- Settle fair housing complaints on behalf of the client
B- Commence a civil action in an appropriate U.S. district or state court on behalf of the
client
C- Require banks to operate in areas that are underserved
D- Conduct educational initiatives to inform people about fair housing obligations -
✔✔D- Conduct educational initiatives to inform people about fair housing obligations
✔✔The clients tried to apply for a mortgage with a couple of online mortgage providers
but were rejected due to excessive debt. Which should the counselor advise the clients
to do after being rejected for a mortgage loan?
A- File bankruptcy to wipe away their debt.
B- Dispute open accounts with creditors.
C- Pay down debt and keep balances low moving forward.
D- Take out a new loan to increase available credit. - ✔✔C- Pay down debt and keep
balances low moving forward.
✔✔One of the clients' relatives agreed to give them funds for the entire downpayment
on the home. For which
mortgage product did they most likely qualify?
A- VA
B- Conventional
C- USDA
D- FHA - ✔✔D- FHA
NOTE: FHA is the only mortgage loan product that allows family assistance. USDA and
VA do not require down payment, and most conventional loans generally will not allow
funds other than those from the borrower as a down payment.
Reference: Module 2.2 Affordable Housing Options, Page Number 5 to 16
