CRMP Ethics and Counseling Requirements 2 — Questions and Answers
Question 1: Under HUD rules, how soon before closing must a HECM borrower complete independent counseling?
- At least 7 days before signing the loan application (Correct answer)
- At least 3 business days before closing
- There is no minimum waiting period after counseling
- At least 30 days before closing
Correct answer: At least 7 days before signing the loan application
HUD requires that borrowers receive counseling at least 7 business days before signing the HECM loan application.
Question 2: A CRMP discovers that a borrower's adult child is pressuring the parent to proceed with a reverse mortgage to pay off the child's debts. What is the most ethical action?
- Proceed with the loan since the borrower signed the application
- Alert the independent counselor and consider filing an elder financial abuse report (Correct answer)
- Ask the adult child to leave future meetings
- Offer a lower loan amount to reduce risk
Correct answer: Alert the independent counselor and consider filing an elder financial abuse report
Signs of financial elder abuse must be reported to appropriate authorities, and the counselor should be alerted to the potential undue influence.
Question 3: Which agency approves and oversees the HECM counseling agencies that provide mandatory independent counseling?
- CFPB
- FHA
- HUD (Correct answer)
- NMLS
Correct answer: HUD
HUD approves and oversees all agencies authorized to provide mandatory HECM independent counseling.
Question 4: A CRMP ethically must disclose which of the following to a prospective reverse mortgage borrower?
- Competitor loan pricing only if asked
- All material facts that could affect the borrower's decision (Correct answer)
- Only information required by state law
- Proprietary lender guidelines
Correct answer: All material facts that could affect the borrower's decision
Ethical standards require CRMPs to disclose all material facts relevant to the borrower's informed decision-making.
Question 5: During HECM counseling, what must the counselor provide to each borrower?
- A guarantee of loan approval
- A HUD-approved list of other reverse mortgage products only
- A certificate of counseling completion and information on alternatives (Correct answer)
- Loan pricing from at least three lenders
Correct answer: A certificate of counseling completion and information on alternatives
Counselors must issue a counseling completion certificate and discuss alternatives such as other home equity options or downsizing.
Question 6: A borrower tells their CRMP they do not want their non-borrowing spouse included in the counseling session. What should the CRMP advise?
- Respect the borrower's preference and exclude the spouse
- Encourage the non-borrowing spouse to attend because their rights under the loan are significant (Correct answer)
- Require the spouse to attend or decline the application
- Have the spouse sign a waiver instead of attending
Correct answer: Encourage the non-borrowing spouse to attend because their rights under the loan are significant
Non-borrowing spouses have important rights and protections under HECM rules, so their attendance at counseling is strongly encouraged.
Question 7: Which statement best describes the CRMP's duty when a client's cognitive ability appears diminished?
- Proceed if the borrower can sign their name
- Pause the process and consult with appropriate parties such as a trusted family member or legal counsel (Correct answer)
- Require a physician's note before any further discussion
- Transfer the file to a non-licensed staff member
Correct answer: Pause the process and consult with appropriate parties such as a trusted family member or legal counsel
A CRMP must protect vulnerable borrowers and should pause, involve trusted parties, and potentially suggest capacity evaluation before proceeding.
CRMP Ethics and Counseling Requirements 2
Under HUD rules, how soon before closing must a HECM borrower complete independent counseling?