HECM Test 2024 All Answers Correct

HECM Test 2024 All Answers Correct A Counseling Agency's failure to follow all basic requirements required by HUD could result in which of the following: A. Termination of agency's HUD approval B. Suspension of agency's HUD approval C. Forfeiture of remaining federal grant funds D. Fines and or imprisonment E. a , b , and c F. all of the above E. Termination of agency's HUD approval Suspension of agency's HUD approval Forfeiture of remaining federal grant funds T/F A counseling agency must offer and provide face-to-face counseling to clients that prefer this format whenever possible. True All of the below statements are requirements that each agency must follow EXCEPT: A .In cases where an agency does not offer unique services requested by the client, the agency must refer the client to another participating agency, preferably in the client's area. B. An agency must maintain a national license and a separate license for each state in which services are provided. C. An agency must make reasonable efforts to provide language assistance to persons who are Limited English Proficiency (LEP). D. An agency must notify HUD and provide a copy of the updated Work Plan prior to implementation of any changes to the agency's Work Plan B T/F Reverse Mortgage counselors must discuss an action plan during each counseling session. False All of the following are true of the client's required "follow up" EXCEPT: A. The follow-up must be completed by a Certified HECM Counselor B. verbal attempts must be made to contact the client for follow-up C. A written letter to the client must request the client contact the agency within 30 days of the date of the letter. D. Issuing surveys to assess housing outcomes does not fully meet the requirement for the client follow-up and hiring a third party agency to conduct the follow up is not prohibited. D. Which of the follow best defines a Reverse Mortgage: A. A federally insured loan that allows borrowers 62 years and older to convert the equity in their home into available cash and which will be paid by heirs of the borrowers upon their passing. (HECM) B. A mortgage available to those with 100% equity and a home in good condition that requires no repairs. C. A mortgage product that pays a homeowner loan proceeds drawn from accumulated home equity and that requires no repayment until a future time. D. A refinance of an existing mortgage only for borrowers 62 years or older. C T/F Agencies are permitted to conduct marketing and outreach including providing general information about housing opportunities and raising awareness about critical housing topics. An agency's staff will be required to have an up-to-date knowledge of which of the following: A. All FHA Single Family mortgage programs B.Lender product availability and rate offerings C.Mortgagee letters D. HUD's website for information on products and guidelines () E. a , b , c F. a , c , d F T/F To receive a FHA HECM loan, a borrower must first receive One-on-One Counseling from a certified HECM Counselor. True True T/F A reverse mortgage counseling agency may charge a fee that exceeds the actual cost to provide the service but only clients and related parties that are able to afford the fee. False T/F Clients must not be turned away because of an inability to pay counseling fee False All are true of entities eligible to provide Reverse Mortgage Counseling EXCEPT: A.An agency must have an affiliating lending institution in order to stay updated with updating lending practices. B. An agency must be have an Active Status on the HECM Roster C. An agency must receive continuing education every two years D. An agency must have access to a technology that allows for adequate HUD reporting A. What are the names of the 2 HUD Booklets that each client must receive before completing a counseling session? Preparing for Your Counseling Session Use Your Home to Stay at Home - A Guide for Homeowners Who Need Help Now Each counseling session must include discussion on all of the following EXCEPT: A. Basic Requirements to the Reverse Mortgage B. Alternatives to the Reverse Mortgage C. Fees and costs associated with the Reverse Mortgage D. Title retention E. All of the above E If the national lending limit is $625,500 and a client's estimated appraised value is $820,000, what f igure are the proposal calculations based on? A. 625,500 B. 820,000 C. 204,500 D. The answer would depend on the regional lending limit A If the national lending limit is $625,500 and a client's estimated appraised value is $820,000, what is this calculation called? Maximum Claim Amount (Lending limit is the same thing) T/F Borrowers should be encouraged by their Loan Officer to consult a financial planner before proceeding with a Reverse Mortgage. False T/F Only one of the borrowers that intends to be on the deed after receiving the reverse mortgage must attend counseling. It is optional for the other borrowers to attend counseling. False T/F For borrowers who lack legal competency, a Power of Attorney may participate in the counseling session in lieu of the borrower themselves. True T/F It is the recommendation of FHA and the agency that non-borrowing spouse attend counseling but it is not a requirement. True T/F The agency is not permitted to provide a copy of the counseling certificate to a borrower's lender. False. What role does FHA (Federal Housing Administration) play in Home Equity Conversion Mortgages? A. FHA sells the HECM loans on the secondary market B. FHA provides a strict rule of guidelines that lenders must adhere to C. FHA insures HECM loans D. FHA first instituted but no longer plays any part in HECM loans How is a reverse mortgage payment plan decided? A. The lender must decide based on the borrower's eligibility B. The borrower chooses which payment plan works best for them C. There is no payment plan on a reverse mortgage C D. A reverse mortgage counselor advises the lender on which plan to use All of the following are true EXCEPT: A. Reverse mortgages can be paid back in periodic increments B B. A HECM is a "non-recourse" loan which means that repayment is not required until the last remaining borrower dies C. Receiving a HECM results in 2 mortgages on the title D. Only a free and clear title can receive a HECM Principal limit on a HECM loan is best described as: A. Maximum initial loan amount D B.Maximum loan balance for the life of the loan C.Maximum home value insured by HUD D. Appraised value or nation HECM mortgage limit, whichever is less B T/F If a public or private non-profit housing counseling agency is not available in a particular area, it is permissible for local HUD office staff to become trained in order to counsel prospective HECM borrowers. All HUD offices maintain a staff of trained counselors. False T/F A borrower's first step in receiving a reverse mortgage is to receive counseling from a certified HECM counselor. True T/F It is not permissible for a lender to discuss or disclose estimated loan figures with a borrower before that borrower receives counseling from a certified HECM counselor True (California being the only exception) Mr. Shadrick has spoken with Bob Loanman about getting a reverse mortgage. Mr. Shadrick was expected to be at his daughter's wedding in Hawaii so he will be completing his reverse mortgage counseling on the telephone while on vacation. Before he goes on vacation he's going to go ahead and get his appraisal inspection done by a licensed appraiser. What is the best way to describe how the appraisal will be paid for? A. The lender cannot charge Mr. Shadrick for this appraisal B.The borrower must pay for the appraisal upfront directly to the appraiser C. The borrower has the option of paying for the appraisal as a part of the closing costs when the reverse mortgage is closed D. The lender is responsible for the appraisal fee in all transactions A A HECM counselor must discuss all of the following with a potential borrower EXCEPT: A. Financial implications B. Necessary credit qualifications C. Alternatives to a HECM D. Consequences to receiving a HECM B T/F Other parties involved in the reverse mortgage transaction including children, financial advisors, and loan officers are encouraged to participate in the HECM counseling session. False A good source for both borrowers and agencies for additional information on available resources for elderly homeowners is known as A. The Area Agency on Aging B. AARP C. D. Consumer Credit Counseling Services (CCCS) A Which of the following is prohibited until the borrower receives counseling? A. Appraisal Inspection B. Preliminary Title Search C. Pulling an AVM D. Taking a loan application A All of the following are true regarding ordering appraisals EXCEPT: A. An FHA Case # is required before an appraisal can be ordered B. An appraiser cannot be chosen directly by a Loan Officer C. If a borrower had an appraisal done on their home before speaking to a lender, the lender may use that appraisal as part of the HECM transaction. (The app