HECM Exam (Latest 2023/ 2024 Update)
Questions and Verified Answers
QUESTION
The repair administration fee is paid to_____.
A. The lender
B. The borrower after repairs are completed
C. The HUD inspector
D. The appraiser
Answer:
A
QUESTION
The lending limit is $625,500, and a borrower has a principal limit of $420,000 and appraised
value is $700,000. What is the max claim amount?
A. $625,500
B. $420,000
C. $700,000
D. Not enough information has been provided to answer the question
Answer:
B
QUESTION
T/F Unlike a traditional mortgage, the closing costs of a HECM are taken out of the loan
proceeds.
Answer:
True
QUESTION
,T/F The borrower does not pay any interest on any of the closing costs that were taken out of the
loan proceeds.
Answer:
False
QUESTION
A borrower has a $200,000 home value. What is the likely upfront cost added to the loan balance
at closing? (Revisit. Where is the formula?)
A. $7,000
B. $10,000
C. $15,000
D. $20,000
Answer:
B
QUESTION
Monthly adjustable rates can't adjust by more than___.
A. Two percentage points per year
B.Five percentage points per year
C. Two percentage points over the life of the loan
D. Ten percentage points over the life of the loan
Answer:
D
QUESTION
Borrowers with delinquent federal debt are not eligible for a HECM___.
A. Ever
B. Until the debt is satisfied
C. For 2 years after the debt is satisfied
D. For 7 years after the debt is satisfied
Answer:
,B
QUESTION
A lender must screen all borrowers on which of the following:
A. LDP
B. GSA
C. CAIVRS
D. All of the above
Answer:
D
QUESTION
A borrower must be what age before signing a loan application in order to receive a HECM?
A. 60
B. 61
C. 62
D. 63
Answer:
B
QUESTION
T/F Only one HECM borrower must be living in the home in order for the HECM loan to close.
Answer:
True
QUESTION
When is a borrower able to close in the name of a Living Trust for a HECM?
A. When all the beneficiaries of the trust are eligible HECM borrowers
B. When all the trustees of the trust are eligible HECM borrowers
C. Both a and b above
D. Can't be done
, Answer:
A
QUESTION
T/F A Durable Power of Attorney is not permitted on HECM loans; only a court appointed
Guardianship.
Answer:
False
QUESTION
A borrower's appraised value is $750,000. What is the required title insurance amount?
A. $750,000
B. $525,000
C. $625,500
D. Not enough information to answer the question
Answer:
A
QUESTION
T/F Generally, unsecured debts other than delinquent Federal debts (i.e. credit card debt),
regardless of their status should not impact negatively on the borrower's eligibility.
Answer:
True
QUESTION
T/F The counseling certificate is generated by each counseling agency on their own letterhead.
Answer:
Questions and Verified Answers
QUESTION
The repair administration fee is paid to_____.
A. The lender
B. The borrower after repairs are completed
C. The HUD inspector
D. The appraiser
Answer:
A
QUESTION
The lending limit is $625,500, and a borrower has a principal limit of $420,000 and appraised
value is $700,000. What is the max claim amount?
A. $625,500
B. $420,000
C. $700,000
D. Not enough information has been provided to answer the question
Answer:
B
QUESTION
T/F Unlike a traditional mortgage, the closing costs of a HECM are taken out of the loan
proceeds.
Answer:
True
QUESTION
,T/F The borrower does not pay any interest on any of the closing costs that were taken out of the
loan proceeds.
Answer:
False
QUESTION
A borrower has a $200,000 home value. What is the likely upfront cost added to the loan balance
at closing? (Revisit. Where is the formula?)
A. $7,000
B. $10,000
C. $15,000
D. $20,000
Answer:
B
QUESTION
Monthly adjustable rates can't adjust by more than___.
A. Two percentage points per year
B.Five percentage points per year
C. Two percentage points over the life of the loan
D. Ten percentage points over the life of the loan
Answer:
D
QUESTION
Borrowers with delinquent federal debt are not eligible for a HECM___.
A. Ever
B. Until the debt is satisfied
C. For 2 years after the debt is satisfied
D. For 7 years after the debt is satisfied
Answer:
,B
QUESTION
A lender must screen all borrowers on which of the following:
A. LDP
B. GSA
C. CAIVRS
D. All of the above
Answer:
D
QUESTION
A borrower must be what age before signing a loan application in order to receive a HECM?
A. 60
B. 61
C. 62
D. 63
Answer:
B
QUESTION
T/F Only one HECM borrower must be living in the home in order for the HECM loan to close.
Answer:
True
QUESTION
When is a borrower able to close in the name of a Living Trust for a HECM?
A. When all the beneficiaries of the trust are eligible HECM borrowers
B. When all the trustees of the trust are eligible HECM borrowers
C. Both a and b above
D. Can't be done
, Answer:
A
QUESTION
T/F A Durable Power of Attorney is not permitted on HECM loans; only a court appointed
Guardianship.
Answer:
False
QUESTION
A borrower's appraised value is $750,000. What is the required title insurance amount?
A. $750,000
B. $525,000
C. $625,500
D. Not enough information to answer the question
Answer:
A
QUESTION
T/F Generally, unsecured debts other than delinquent Federal debts (i.e. credit card debt),
regardless of their status should not impact negatively on the borrower's eligibility.
Answer:
True
QUESTION
T/F The counseling certificate is generated by each counseling agency on their own letterhead.
Answer:
