UPDATED HUD Exam - Financial Management SOLUTIONS 100% PASS

All of the following would help a counselor develop a realistic household budget, except: A. Payment information for a paid-off car B. Amount spent on groceries C. Rent payment information D. Monthly cable bill - ANSWER Answer: A Since the car is paid off, the expense does not need to be included in the new budget. All of the following are reasons why it is important for a client to track income and expenses before finalizing a budget, except: A. It helps show clients that they spend less on some expenses than they think. B. It helps identify spending habits C. It helps show clients that their spending and expenses are out of control. D. It helps define realistic and attainable goals and timelines. - ANSWER Answer: C. Clients may find that their spending and expenses are out of control. However, the purpose of tracking is to inform realistic budget preparation, not to condone or condemn a client's judgement. Which of the following is a "want" and not a "need" A. Health care premium B. Car insurance C. Gym Membership D. Rent - ANSWER Answer: C. Gym Membership. What information is used in determining a budget (give 4) - ANSWER Pay Stub, Bank Statements, Utility Bills, and Social Security Award Letter. Ray's commute on the bus takes over an hour, so he wants to buy a car as soon as possible, but he has poor credit and cannot obtain a loan right now. He thinks he can find a reliable car for about $2,000 and has about 20% of the total in the bank from his tax refund. if Ray's goal is to buy a car within 8 months, what is the minimum amount he needs to save each month? - ANSWER Ray has 20% of $2,000 saved, or $400, so he needs at lease $1,600 more to reach his goal. If he saves for 8 months, he will need to save $200 each month. Which section of a credit report will contain employer details? - ANSWER Personal Information Which section of a credit report will contain information about a student loan - ANSWER Account Information Which section of a credit report will contain court information such as bankruptcy? - ANSWER Public Records Which section of a credit report will show recent attempts to open a credit card? - ANSWER Inquiries Which section of a credit report will contain information about how to correct inaccuracies? - ANSWER Consumer Rights. Account History - ANSWER Payment history of accounts, including late payments, delinquencies, judgments, and liens Amounts Owed - ANSWER Ratio of total credit extended to the amount of credit owed Length of Credit History - ANSWER Overall length of credit history in the report, as well as the average age of accounts Types of credit used - ANSWER Variety of accounts (e.g., credit card, auto loan, mortgage) New Credit - ANSWER Number of recent credit inquiries, as well as new credit accounts. Where should a client go to obtain a free credit report? A. B. C. D. - ANSWER C. This is the federally authorized site for consumers to obtain free credit reports from each of the three main credit reporting agencies. Which complies with fair credit laws? A. an employer can check a credit report at any time B. A vendor can display part of the credit card number on the sales receipt C. A credit reporting agency can list information about a collection over eight years old. D. A creditor can acknowledge a consumer dispute after two months. - ANSWER B. A vendor can display part of the credit card number on the sales receipt. -The Fair and Accurate Credit Transactions Act (FACTA) protects consumers from potential identity theft by limiting the information allowed on the sales receipt. Which federal law protects a consumer's right to dispute a billing error associated with his or her credit card account? - ANSWER The Fair Credit Billing Act (FCBA) Fair and Accurate Credit Transactions Act (FACTA) - ANSWER enables consumers to receive a free credit report from the three credit reporting agencies each year, to place a fraud alert on their credit file, and to safeguard credit card numbers on receipts. Fair Credit Reporting Act - ANSWER protects consumers from erroneous information being added to their credit file. Allows consumer to dispute errors associated with credit card account. Stop Payment Fee - ANSWER fees charged to stop payment on a check before the check is cashed. Clients may not want a check to be cashed when they are suspicious of a scam, have lost a check, or have realized that there are insufficient funds in their account. Service Fee - ANSWER fees charged by a financial institution for account maintenance. Thought typically a monthly fee it can be charged annually. Overdraft Fee - ANSWER fees charged when an account does not have enough money to cover a purchase and the financial institution loans money to complete the payment. This creates a negative loan to repay and interest will be charged on the balance. NSF Fee - ANSWER Non-sufficient funds/returned item fees are fees charged if there is not enough money in an account to cover a purchase. In addition to a fee, the returned item (or bounced check) may result in additional charges from the creditor. All of the following are immediate steps a client should take in the event of identity theft, except: A. Create an identity theft report B Contact the insurance company C. order credit report from the credit reporting agencies D. Place a fraud alert. - ANSWER B. Contact the insurance company. In some cases, bankruptcy may be the best option for a client. Which of the following options would be the least appropriate for a housing counselor to present as an alternative?