HECM REAL TEST ACTUAL QUESTIONS AND ANSWERS
WITH LATEST UPDATES 2023-2024
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 - ANSWER-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. - ANSWER-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 - ANSWER-B
T/F Reverse Mortgage counselors must discuss an action plan during each
counseling session. - ANSWER-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. - ANSWER-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. -
ANSWER-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. - ANSWER-True
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 (www.hud.gov)
E. a , b , c
F. a , c , d - ANSWER-F
T/F To receive a FHA HECM loan, a borrower must first receive One-on-One
Counseling from a certified HECM Counselor. - ANSWER-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. - ANSWER-False
T/F Clients must not be turned away because of an inability to pay counseling fee -
ANSWER-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 - ANSWER-A.
What are the names of the 2 HUD Booklets that each client must receive before
completing a counseling session? - ANSWER-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 - ANSWER-E
, If the national lending limit is $625,500 and a client's estimated appraised value is
$820,000, what figure 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 - ANSWER-A
If the national lending limit is $625,500 and a client's estimated appraised value is
$820,000, what is this calculation called? - ANSWER-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. - ANSWER-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. - ANSWER-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. - ANSWER-True
T/F It is the recommendation of FHA and the agency that non-borrowing spouse
attend counseling but it is not a requirement. - ANSWER-True
T/F The agency is not permitted to provide a copy of the counseling certificate to a
borrower's lender. - ANSWER-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 - ANSWER-C
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
D. A reverse mortgage counselor advises the lender on which plan to use -
ANSWER-B
All of the following are true EXCEPT:
A. Reverse mortgages can be paid back in periodic increments
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 - ANSWER-D
Principal limit on a HECM loan is best described as:
A. Maximum initial loan amount
WITH LATEST UPDATES 2023-2024
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 - ANSWER-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. - ANSWER-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 - ANSWER-B
T/F Reverse Mortgage counselors must discuss an action plan during each
counseling session. - ANSWER-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. - ANSWER-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. -
ANSWER-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. - ANSWER-True
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 (www.hud.gov)
E. a , b , c
F. a , c , d - ANSWER-F
T/F To receive a FHA HECM loan, a borrower must first receive One-on-One
Counseling from a certified HECM Counselor. - ANSWER-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. - ANSWER-False
T/F Clients must not be turned away because of an inability to pay counseling fee -
ANSWER-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 - ANSWER-A.
What are the names of the 2 HUD Booklets that each client must receive before
completing a counseling session? - ANSWER-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 - ANSWER-E
, If the national lending limit is $625,500 and a client's estimated appraised value is
$820,000, what figure 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 - ANSWER-A
If the national lending limit is $625,500 and a client's estimated appraised value is
$820,000, what is this calculation called? - ANSWER-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. - ANSWER-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. - ANSWER-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. - ANSWER-True
T/F It is the recommendation of FHA and the agency that non-borrowing spouse
attend counseling but it is not a requirement. - ANSWER-True
T/F The agency is not permitted to provide a copy of the counseling certificate to a
borrower's lender. - ANSWER-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 - ANSWER-C
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
D. A reverse mortgage counselor advises the lender on which plan to use -
ANSWER-B
All of the following are true EXCEPT:
A. Reverse mortgages can be paid back in periodic increments
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 - ANSWER-D
Principal limit on a HECM loan is best described as:
A. Maximum initial loan amount
