CRMP - Certified Reverse Mortgage Professional Ethics and Professional Conduct Questions and Answers

Question 1

A CRMP is working with a client who needs mandatory repairs as a condition of their HECM loan.
The CRMP's cousin owns a reputable home repair company.
What is the most ethical action for the CRMP to take?

Accepted Answer

Recommend the cousin's company along with others, but only if the family relationship is fully disclosed to the client in writing.

Answer

Recommend only the cousin's company to ensure the work is done quickly and by a trusted source.

Answer

Provide the client with a list of several qualified, unaffiliated contractors for them to choose from.

Answer

Insist the borrower use the cousin's company but offer to pay for the appraisal out of pocket to offset the conflict.

Question 2

Which of the following statements in a television advertisement for a HECM would be considered a prohibited, misleading practice?

Accepted Answer

"This is a government benefit that ensures you will never lose your home for any reason."

Answer

"This FHA-insured loan allows you to access your home's equity."

Answer

"You can eliminate your monthly mortgage payment and improve your cash flow."

Answer

"You must still pay your property taxes and homeowner's insurance."

Question 3

A prospective HECM borrower is having trouble finding a HUD-approved counselor with immediate availability. To help the client, the loan originator offers to call a specific counseling agency where they have a good relationship and schedule the appointment on the borrower's behalf. This action is:

Accepted Answer

Prohibited, as it could be construed as steering and interferes with the counselor's independence.

Answer

Permitted as good customer service to help an elderly client.

Answer

Permitted only if the originator provides the client with a list of at least three other agencies.

Answer

Prohibited, unless the loan originator discloses the action in the loan file.

Question 4

A loan originator meets with an elderly client and their adult child. The child is adamant that their parent take the maximum cash out at closing to help with the child's own financial difficulties. The client appears confused and uncertain. According to the NRMLA Code of Ethics, what is the originator's primary responsibility?

Accepted Answer

To ensure the client fully understands the loan terms and is making a voluntary decision free from undue influence.

Answer

To follow the child's instructions, as they are acting as a family advisor.

Answer

To structure the loan as the child requests but make a note of the client's hesitation in the file.

Answer

To refuse the application immediately and report the adult child for suspected financial abuse.

Question 5

Which of the following best demonstrates a CRMP's commitment to the ethical principle of professional competency?

Accepted Answer

Attending an industry conference to learn about recent changes to FHA's Financial Assessment guidelines.

Answer

Matching a competitor's interest rate to win a client's business.

Answer

Sponsoring a table at a local senior health fair.

Answer

Maintaining a professional and accessible office space.

Question 6

A loan originator receives an application from a prospective borrower who lives in a neighborhood primarily occupied by a racial minority group. The originator knows from experience that appraisals in this area often come in lower than expected. How should the originator ethically proceed in accordance with fair lending laws?

Accepted Answer

Evaluate the application based on the borrower's individual financial merits and the property's specific characteristics, without regard to neighborhood demographics.

Answer

Advise the applicant that their neighborhood makes the loan riskier and suggest they apply for a smaller loan amount.

Answer

Increase the origination fee to compensate for the perceived property risk.

Answer

Inform the appraiser about the neighborhood's demographic composition to ensure they are aware of all factors.

A CRMP is working with a client who needs mandatory repairs as a condition of their HECM loan.The CRMP's cousin owns a reputable home repair company.What is the most ethical action for the CRMP to take?

A CRMP is working with a client who needs mandatory repairs as a condition of their HECM loan.
The CRMP's cousin owns a reputable home repair company.
What is the most ethical action for the CRMP to take?