CRMP - Certified Reverse Mortgage Professional Client Assessment and Eligibility Questions and Answers

Question 1

A 70-year-old client is applying for a HECM.
His wife is 60 years old.
To maximize the loan proceeds, he suggests that only he be listed as the borrower.
What is the most critical issue to discuss with this couple regarding this strategy?

Accepted Answer

If the borrowing husband passes away, the non-borrowing spouse may have to repay the loan or vacate the property if she doesn't meet specific HUD requirements.

Answer

The loan amount will be based on the 70-year-old's age, potentially increasing the proceeds.

Answer

The 60-year-old wife must attend the counseling session even if she is not a borrower.

Answer

The property title must be solely in the name of the 70-year-old husband before the loan can close.

Question 2

During a financial assessment for a HECM loan, which of the following is the PRIMARY reason for analyzing the client's credit history and residual income?

Accepted Answer

To assess the client's willingness and capacity to meet ongoing property charge obligations, such as taxes and insurance.

Answer

To determine the interest rate for the reverse mortgage.

Answer

To ensure the client has sufficient funds for discretionary spending.

Answer

To calculate the maximum principal limit the borrower can receive.

Question 3

Which of the following property types is generally INELIGIBLE for an FHA-insured HECM?

Accepted Answer

A unit in a condominium project that is not on the FHA-approved list.

Answer

A single-family home that is the borrower's primary residence.

Answer

A four-unit dwelling where the borrower occupies one of the units as their primary residence.

Answer

A manufactured home that meets FHA guidelines.

Question 4

A client, age 65, wants to obtain a HECM. She owns her home outright, but she has been delinquent on her federal income taxes for the past two years. How does this outstanding federal debt affect her eligibility?

Accepted Answer

She is ineligible for a HECM until the delinquent federal debt is resolved.

Answer

It has no impact, as the HECM is based on home equity, not tax compliance.

Answer

She will be required to enter into a payment plan with the IRS before closing.

Answer

A portion of the HECM proceeds must be set aside in a LESA to pay the back taxes.

Question 5

What is the mandatory first step a prospective HECM borrower must complete before a lender can even begin processing a loan application?

Accepted Answer

Receive counseling from a HUD-approved counseling agency.

Answer

Obtain an FHA appraisal of their property.

Answer

Provide three years of income tax returns to the lender.

Answer

Pay for a title search and preliminary title report.

Question 6

A 75-year-old individual is applying for a HECM on their primary residence. They also own a vacation cabin in another state. How is the vacation cabin treated during the eligibility assessment?

Accepted Answer

The property taxes and insurance on the vacation cabin are included in the financial assessment to determine the ability to pay obligations.

Answer

The equity in the vacation cabin can be used to increase the HECM loan amount.

Answer

The vacation cabin is irrelevant to the HECM application.

Answer

The client must sell the vacation cabin to be eligible for a HECM.

A 70-year-old client is applying for a HECM.His wife is 60 years old.To maximize the loan proceeds, he suggests that only he be listed as the borrower.What is the most critical issue to discuss with this couple regarding this strategy?

A 70-year-old client is applying for a HECM.
His wife is 60 years old.
To maximize the loan proceeds, he suggests that only he be listed as the borrower.
What is the most critical issue to discuss with this couple regarding this strategy?