Certified Reverse Mortgage Professional (CRMP) Exam — Questions and Answers

Question 1: A borrower selects a HECM adjustable-rate line of credit and makes no draws for several years. What happens to the unused portion of the line of credit over time?

It is forfeited if unused for more than 5 years
It remains static until the borrower makes a draw
It grows at the same rate as the loan's interest rate plus the annual MIP rate (Correct answer)
It decreases as accrued interest reduces available funds

Correct answer: It grows at the same rate as the loan's interest rate plus the annual MIP rate

The unused portion of a HECM line of credit grows at the loan's interest rate plus the annual MIP rate, increasing the borrower's available funds over time.

Question 2: During counseling, a client discloses that a non-borrowing spouse will remain in the home. What is the counselor's MOST important obligation?

Explain the protections and limitations for non-borrowing spouses under current HECM rules (Correct answer)
Advise the client to remove the spouse from the title to simplify the loan
Inform the lender immediately about the non-borrowing spouse's presence
Recommend the spouse be added as a co-borrower if they are under age 62

Correct answer: Explain the protections and limitations for non-borrowing spouses under current HECM rules

Counselors must fully explain non-borrowing spouse deferral rights and the conditions under which they can remain in the home after the borrower's death or departure.

Question 3: During a HECM financial assessment, a borrower has a monthly residual income of $450. The required residual income threshold for a household of two in a non-Northeast region is $529. What must the lender do?

Approve without condition since the gap is less than $100
Require a Life Expectancy Set-Aside (LESA) (Correct answer)
Deny the loan outright
Waive the shortfall if the borrower has good credit

Correct answer: Require a Life Expectancy Set-Aside (LESA)

When residual income falls below HUD's threshold, the lender must establish a LESA to cover future property charges.

Question 4: Under the HECM Initial Disbursement Limit rules, what percentage of the Principal Limit may a borrower access at closing if they have no mandatory obligations?

75% of the Principal Limit during the first 12 months
60% of the Principal Limit during the first 12 months (Correct answer)
50% of the Principal Limit during the first 12 months
100% of the Principal Limit

Correct answer: 60% of the Principal Limit during the first 12 months

Borrowers with no or low mandatory obligations are limited to 60% of the Principal Limit during the first 12 months to reduce early loan balance growth.

Question 5: How does the HECM program handle a scenario where two spouses are both listed as borrowers and one moves to a care facility while the other remains in the home?

The loan is modified to remove the absent borrower's name from the note
The remaining borrower must requalify for the HECM under current underwriting standards
The loan continues as long as at least one borrower still occupies the home as their principal residence (Correct answer)
The loan becomes immediately due and payable when one borrower leaves the home

Correct answer: The loan continues as long as at least one borrower still occupies the home as their principal residence

A HECM is not due and payable until the LAST surviving borrower vacates the property, so one spouse remaining in the home keeps the loan in good standing.

Question 6: Which practice would constitute a conflict of interest for a CRMP?

Disclosing all lender fees upfront in the Loan Estimate
Maintaining separate professional and personal finances
Referring borrowers to HUD-approved housing counselors
Receiving undisclosed referral fees from a title company recommended to borrowers (Correct answer)

Correct answer: Receiving undisclosed referral fees from a title company recommended to borrowers

Undisclosed referral fees create a financial conflict of interest that undermines the borrower's trust and violates NRMLA ethics standards.

Question 7: When performing a HECM suitability assessment, which situation best warrants recommending against a HECM?

A borrower whose heirs have expressed no interest in inheriting the property
A borrower who plans to sell the property within 2 years and would incur significant upfront costs relative to short-term benefit (Correct answer)
A borrower who has previously used a home equity line of credit
A borrower with no monthly income who needs to eliminate their existing mortgage payment

Correct answer: A borrower who plans to sell the property within 2 years and would incur significant upfront costs relative to short-term benefit

The high upfront costs of a HECM (origination fees, MIP, closing costs) make it a poor financial choice for borrowers who plan to move or sell in the near term.

Question 8: A borrower's non-borrowing spouse is 58 years old. Under current HUD guidelines, what protection applies to this spouse?

The loan is ineligible until the spouse turns 62
The spouse may remain in the home as a Deferral Period eligible non-borrowing spouse if HUD criteria are met (Correct answer)
The spouse automatically becomes a co-borrower
The spouse has no protections and must vacate upon the borrower's death

Correct answer: The spouse may remain in the home as a Deferral Period eligible non-borrowing spouse if HUD criteria are met

HUD's Mortgagee Letter 2014-07 and subsequent guidance established the Deferral Period allowing eligible non-borrowing spouses to remain in the home after the borrower's death if specific conditions are met.

Question 9: A CRMP suspects a borrower has been the victim of a home repair scam where contractor receives HECM proceeds directly. What is the appropriate response?

Restructure the loan to pay the contractor in installments
Allow the transaction if the borrower consents in writing
Report the suspected fraud to HUD and recommend the borrower consult an attorney (Correct answer)
Refer the borrower to a different lender

Correct answer: Report the suspected fraud to HUD and recommend the borrower consult an attorney

Direct payment to contractors from HECM proceeds in scam scenarios constitutes financial exploitation and must be reported to HUD.

Question 10: A HECM applicant meets the credit history requirements but has insufficient monthly income to cover their ongoing property charges and meet residual income thresholds. Which of the following would be an acceptable method for the applicant to satisfy the Financial Assessment requirements without requiring a Life Expectancy Set-Aside (LESA)?

Documenting significant verifiable liquid assets, such as from a 401(k) or savings account, that can be used to offset the shortfall. (Correct answer)
Showing a history of large, irregular cash withdrawals from a brokerage account.
Pledging future HECM draws from their available line of credit.
Providing a gift letter from a family member promising to pay the charges annually.

Correct answer: Documenting significant verifiable liquid assets, such as from a 401(k) or savings account, that can be used to offset the shortfall.

HUD guidelines allow for a process called 'Asset Dissipation,' where a borrower's documented liquid assets can be converted into a qualifying monthly income stream to offset a shortfall in residual income. The underwriter verifies the assets are sufficient to cover property charges. Future HECM draws, gift letters from non-parties to the loan, and irregular withdrawals are not considered stable income sources for this purpose.

Question 11: A HECM borrower has an existing forward mortgage of $80,000. How must this be handled at closing?

It must be paid off with HECM proceeds at or before closing (Correct answer)
The servicer negotiates a payoff schedule post-closing
It converts automatically into a second mortgage
It can remain in place as a subordinate lien

Correct answer: It must be paid off with HECM proceeds at or before closing

HECM loans must be in first-lien position, so any existing mortgage must be paid off at closing using loan proceeds.

Question 12: Which scenario would require a borrower to undergo a second HECM counseling session?

The borrower selects a different lender after initial counseling
The borrower changes their disbursement plan from lump sum to line of credit
The counseling certificate has expired and the loan has not yet closed (Correct answer)
The borrower's property appraisal comes in lower than expected

Correct answer: The counseling certificate has expired and the loan has not yet closed

If the 180-day counseling certificate expires before closing, the borrower must complete a new counseling session to obtain a fresh certificate.

Question 13: What document must be provided to a HECM applicant within 3 business days of application, disclosing estimated loan costs and terms?

HUD-1 Settlement Statement
Closing Disclosure
Good Faith Estimate (GFE)
Loan Estimate (Correct answer)

Correct answer: Loan Estimate

Under TRID rules, lenders must provide a Loan Estimate within 3 business days of receiving a complete application, disclosing key loan terms and estimated costs.

Question 14: Which property type is generally NOT eligible for a HECM?

Single-family home
HUD-approved manufactured home on a permanent foundation
Cooperative (co-op) housing unit (Correct answer)
FHA-approved condominium unit

Correct answer: Cooperative (co-op) housing unit

Co-op units are not eligible for HECM because the borrower holds shares rather than real property, which does not meet FHA collateral requirements.

Question 15: What is the purpose of the mortgage insurance premium (MIP) collected at HECM closing?

It is held in escrow to pay future property taxes
It funds the FHA Mutual Mortgage Insurance Fund, which guarantees the loan (Correct answer)
It pays the lender's origination costs
It compensates the counselor for services rendered

Correct answer: It funds the FHA Mutual Mortgage Insurance Fund, which guarantees the loan

The upfront MIP goes into the FHA Mutual Mortgage Insurance Fund, which protects borrowers by guaranteeing loan advances if the lender fails and ensuring non-recourse protection.

Question 16: Which of the following property types is generally INELIGIBLE for an FHA-insured HECM?

A manufactured home that meets FHA guidelines.
A single-family home that is the borrower's primary residence.
A four-unit dwelling where the borrower occupies one of the units as their primary residence.
A unit in a condominium project that is not on the FHA-approved list. (Correct answer)

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

For a condominium to be eligible for a HECM, the entire condominium project must be approved by the FHA, or the specific unit must qualify for Single-Unit Approval. A unit in a non-approved project is generally ineligible. Single-family homes, 1-4 unit properties with one unit owner-occupied, and FHA-compliant manufactured homes are all potentially eligible property types.

Question 17: What is a HECM 'due and payable' event?

When the loan balance exceeds the home value
An event that triggers loan repayment, such as the borrower's death or sale of the home (Correct answer)
A scheduled annual review of the loan balance
When the borrower requests a lump sum disbursement

Correct answer: An event that triggers loan repayment, such as the borrower's death or sale of the home

A due and payable event triggers full repayment of a HECM, including the borrower's death, permanent move-out, or sale of the property.

Question 18: A HECM borrower on a tenure payment plan permanently moves into an assisted living facility and no longer uses the mortgaged home as their primary residence. What happens to their monthly payments?

Payments continue for an additional 12-month grace period
Payments cease because primary residency is a condition of the tenure plan (Correct answer)
Payments reduce by 50% for up to 24 months to assist with transition costs
Payments continue until the end of the current calendar year

Correct answer: Payments cease because primary residency is a condition of the tenure plan

Tenure payments are conditioned on the borrower's primary residency; once the borrower permanently vacates the home, tenure payments stop and the loan becomes due and payable.

Question 19: When must reverse mortgage counseling be completed?

After the closing of the loan.
Only if the lender requests it.
Before the loan application process begins (Correct answer)
Any time after disbursement.

Correct answer: Before the loan application process begins

Reverse mortgage counseling is a mandatory step designed to protect consumers and must be completed *before* the borrower formally applies for the loan. This timing ensures that borrowers receive comprehensive, unbiased information and understand the product fully before committing to the application process, allowing them to make an informed decision.

Question 20: Which property type is NOT eligible for a standard HECM loan?

FHA-approved condominium unit
Manufactured home on a permanent foundation meeting HUD standards
Single-family home
Cooperative (co-op) unit in most states (Correct answer)

Correct answer: Cooperative (co-op) unit in most states

Co-op units are generally ineligible for HECMs because the borrower owns shares, not real property, which does not meet FHA's collateral requirements.

Question 21: A CRMP who is also a licensed financial advisor recommends a reverse mortgage to fund an annuity product they sell. This situation most likely represents:

A normal dual-role arrangement common in financial services
An acceptable practice if the borrower signs an acknowledgment form
A serious conflict of interest requiring full disclosure and possibly recusal (Correct answer)
An efficient cross-selling strategy benefiting the client

Correct answer: A serious conflict of interest requiring full disclosure and possibly recusal

Dual roles that generate layered commissions create compounded conflicts of interest requiring transparent disclosure and independent advice.

Question 22: A HECM borrower receives counseling and then decides to add a spouse to the title before closing. Does this require a new counseling session?

No, but the spouse must be present at closing to sign non-borrower disclosures
Yes, always, because any title change requires new counseling
It depends on whether the spouse will be a co-borrower or only a non-borrowing spouse added for estate purposes (Correct answer)
No, because the original certificate covers all future title holders

Correct answer: It depends on whether the spouse will be a co-borrower or only a non-borrowing spouse added for estate purposes

If the spouse becomes a co-borrower, they must complete counseling; if added only to title as a non-borrowing spouse, additional counseling is not necessarily required but the lender must verify eligibility.

Question 23: How long do eligible non-borrowing spouses have to remain in the home after the borrowing spouse's death under current HUD guidelines?

1 year
6 months
For as long as they meet deferral period requirements (Correct answer)
5 years

Correct answer: For as long as they meet deferral period requirements

An eligible non-borrowing spouse may remain in the home indefinitely as long as they meet all HUD deferral period requirements.

Question 24: Under NRMLA's Code of Ethics, what must an originator do if they identify a potential conflict of interest?

Disclose the conflict to the borrower and resolve or withdraw (Correct answer)
Proceed normally without disclosure
Obtain written approval from HUD
Report the conflict only to their employer

Correct answer: Disclose the conflict to the borrower and resolve or withdraw

NRMLA's ethical standards require members to disclose conflicts of interest to borrowers and either resolve the conflict or withdraw from the transaction.

Question 25: A borrower selects a 'modified tenure' payment plan. What two components does this option combine?

A lump sum payment with monthly tenure payments
A lump sum with a line of credit
Monthly term payments with a line of credit
A line of credit set-aside with monthly tenure payments (Correct answer)

Correct answer: A line of credit set-aside with monthly tenure payments

A modified tenure plan combines a line of credit set-aside with monthly tenure payments, giving the borrower both a reserve amount and regular lifetime monthly disbursements.

Question 26: What should be done if a borrower's capacity is in doubt?

Refer for mental competency assessment (Correct answer)
Ignore and proceed
Postpone counseling
Ask a family member to sign

Correct answer: Refer for mental competency assessment

If a CRMP has doubts about a borrower's mental capacity to understand the complex terms of a reverse mortgage, it is an ethical and responsible practice to refer them for a mental competency assessment. This ensures the borrower can make an informed decision and protects them from potentially entering into a contract they don't fully comprehend. Proceeding without addressing these doubts would be unethical.

Question 27: A HECM borrower wants to add a new co-borrower after loan origination. What is the correct response?

Explain that co-borrowers cannot be added after origination; a new loan would be required (Correct answer)
Add the co-borrower via a simple amendment to the existing loan documents
Allow the addition after completing a new Financial Assessment only
Contact HUD directly to update the borrower roster

Correct answer: Explain that co-borrowers cannot be added after origination; a new loan would be required

HECM program rules do not permit adding co-borrowers to an existing loan; the original loan would need to be refinanced with both parties as borrowers.

Question 28: A 65-year-old borrower is interested in a HECM for Purchase to buy a new primary residence. They are selling their current home and will have significant cash proceeds. What is a key feature of the HECM for Purchase program they should understand?

The HECM for Purchase can only be used to buy a single-family residence and not a condominium.
The loan requires monthly principal and interest payments, but only after the first five years.
The program requires no down payment if the borrower has sufficient equity in their previous home.
The borrower must make a significant down payment using their own funds, with the HECM financing the remainder. (Correct answer)

Correct answer: The borrower must make a significant down payment using their own funds, with the HECM financing the remainder.

The HECM for Purchase program allows seniors to buy a new home and get a reverse mortgage in a single transaction. A key requirement is that the borrower must contribute a significant down payment from their own funds (often from the sale of a previous home). The HECM loan then finances the remaining portion of the purchase price.

Question 29: Which interest rate index was historically used as the basis for adjustable-rate HECM products before LIBOR was phased out?

Federal Funds Rate
SOFR (Secured Overnight Financing Rate)
LIBOR (London Interbank Offered Rate) (Correct answer)
Prime Rate

Correct answer: LIBOR (London Interbank Offered Rate)

LIBOR was the traditional index for ARM HECMs; it has since been replaced by SOFR following the global LIBOR phase-out.

Question 30: What is the minimum age requirement to qualify for a reverse mortgage?

55
62 (Correct answer)
60
65

Correct answer: 62

To qualify for a Home Equity Conversion Mortgage (HECM), the most widely available type of reverse mortgage, all borrowers listed on the property's title must be at least 62 years old. This age requirement is a fundamental eligibility criterion established by the Federal Housing Administration (FHA) to ensure the product serves its intended demographic of senior homeowners.

Question 31: The Home Ownership and Equity Protection Act (HOEPA) primarily protects reverse mortgage borrowers from:

Predatory high-cost loan terms (Correct answer)
Inadequate counseling sessions
Insufficient home equity
Property tax delinquency

Correct answer: Predatory high-cost loan terms

HOEPA establishes protections against predatory lending by imposing restrictions on high-cost loans, including certain reverse mortgage products.

Question 32: When assessing a borrower's cash flow, which of the following recurring obligations is NOT typically included as a monthly liability?

Car loan payments
Minimum credit card payments
Student loan payments
Utility bills (Correct answer)

Correct answer: Utility bills

Utility bills are accounted for in the residual income budget, not counted as a credit liability in the debt ratio.

Question 33: A loan originator is working with a married couple. The husband is 70 years old, but his wife is 59. They want to proceed with a HECM. The wife will be classified as a Non-Borrowing Spouse (NBS). To ensure the wife can remain in the home after her husband passes away under the deferral period, what specific action must occur at origination?

The wife must sign the note and mortgage along with her husband.
A life insurance policy must be purchased in the husband's name for the benefit of the lender.
The loan amount must be reduced by a factor based on the wife's age.
The wife must be specifically identified as an 'Eligible Non-Borrowing Spouse' in the loan documents. (Correct answer)

Correct answer: The wife must be specifically identified as an 'Eligible Non-Borrowing Spouse' in the loan documents.

For a Non-Borrowing Spouse to be protected by the deferral period (allowing them to remain in the home after the borrower's death), they must be identified as an 'Eligible Non-Borrowing Spouse' in the HECM loan documents at the time of origination and closing. This status is contingent on meeting specific criteria, such as being legally married at closing and occupying the home as a principal residence.

Question 34: What is the purpose of the Right of Rescission under TILA for HECM transactions?

It permits HUD to rescind FHA insurance in cases of fraud
It gives borrowers three business days after closing to cancel the loan without penalty (Correct answer)
It allows borrowers to rescind the counseling requirement
It allows the lender to cancel the loan within three days of closing

Correct answer: It gives borrowers three business days after closing to cancel the loan without penalty

Under TILA, borrowers have a three-business-day right of rescission after closing on a HECM, during which they can cancel without penalty.

Question 35: Which of the following is a disbursement option for reverse mortgages?

Any combination of lump sum, monthly payments, and line of credit (Correct answer)
Line of credit only.
Monthly payments only.
Lump sum only.

Correct answer: Any combination of lump sum, monthly payments, and line of credit

Reverse mortgages offer flexible disbursement options to meet various financial needs. Borrowers can choose to receive their funds as a single lump sum, regular monthly payments (for a fixed term or for as long as they live in the home), or a line of credit that they can draw from as needed. They can also combine these options to create a personalized financial solution.

Question 36: A married couple is applying for a HECM. The husband is 72 and will be the sole borrower. His wife is 60 and will be a Non-Borrowing Spouse (NBS). To ensure the loan is FHA-insurable and the NBS protections are in place, what is the counseling requirement for the wife?

She must attend the counseling session. (Correct answer)
She can sign a waiver to bypass the counseling requirement.
She is strongly encouraged, but not required, to attend the counseling session.
She only needs to attend if she is also a co-owner of the property.

Correct answer: She must attend the counseling session.

For a HECM to be FHA-insurable where a Non-Borrowing Spouse exists, HUD requires the NBS to receive counseling and sign the counseling certificate. This ensures the NBS fully understands their rights, the conditions of the deferral period that may allow them to remain in the home after the borrower's death, and their responsibilities under the loan terms.

Question 37: A client asks the HECM counselor to recommend the best lender for their situation. The counselor should:

Decline to recommend specific lenders and explain that selecting a lender is the borrower's decision (Correct answer)
Refer the client back to the lender who initiated the counseling referral
Suggest the client use HUD's lender search tool and compare at least three offers
Provide a ranked list of lenders based on current interest rates

Correct answer: Decline to recommend specific lenders and explain that selecting a lender is the borrower's decision

Counselors maintain neutrality by not endorsing specific lenders, though they may educate clients on how to shop for and compare reverse mortgage offers.

Question 38: Which proprietary reverse mortgage feature most commonly distinguishes it from a HECM?

It requires FHA insurance
It mandates HUD-approved counseling
It can exceed the FHA lending limit for high-value homes (Correct answer)
It is only available to borrowers over age 70

Correct answer: It can exceed the FHA lending limit for high-value homes

Proprietary (jumbo) reverse mortgages are designed for homes exceeding the FHA lending limit, allowing larger loan amounts.

Question 39: What is the maximum timeframe a borrower's estate has to repay or sell the home after a HECM becomes due and payable?

30 days
2 years
6 months, with possible extensions up to 12 months (Correct answer)
No deadline exists

Correct answer: 6 months, with possible extensions up to 12 months

Heirs typically have 6 months to repay or sell, and may request up to two 90-day extensions for a maximum of 12 months.

Question 40: Under HUD guidelines, the Life Expectancy Set-Aside (LESA) is established to ensure borrowers can pay:

Monthly servicing fees for the loan term
Monthly mortgage insurance premiums only
Property charges including taxes and insurance over the borrower's expected tenure (Correct answer)
Closing costs and origination fees

Correct answer: Property charges including taxes and insurance over the borrower's expected tenure

A LESA reserves funds from the loan proceeds to cover property taxes, homeowner's insurance, and other property charges for the borrower's projected life expectancy.

Question 41: A borrower owns a home in a flood zone. How does this affect HECM eligibility from a financial assessment standpoint?

Flood zone properties require a double LESA
The borrower must relocate before applying
The home is automatically ineligible for a HECM
Flood insurance premiums must be factored into the ongoing property charge obligations (Correct answer)

Correct answer: Flood insurance premiums must be factored into the ongoing property charge obligations

Flood insurance is a mandatory property charge for homes in flood zones and must be included when calculating the borrower's ability to sustain property charges.

Question 42: Which of the following best describes 'residual income' in the context of HECM financial assessment?

Income remaining after subtracting all monthly debt obligations and living expenses (Correct answer)
Total gross income before any deductions or obligations
Net income after federal and state income taxes only
Income from investments and savings accounts only

Correct answer: Income remaining after subtracting all monthly debt obligations and living expenses

Residual income is the amount of net income remaining after all monthly obligations and estimated living expenses are deducted, used to gauge a borrower's ability to maintain property charges.

Question 43: Under the HECM program's non-recourse feature, which party absorbs any shortfall when the loan balance exceeds the home's sale proceeds at loan termination?

The borrower's estate
The servicer who originated the loan
FHA through the Mutual Mortgage Insurance Fund (MMIF) (Correct answer)
The secondary market investor who holds the loan

Correct answer: FHA through the Mutual Mortgage Insurance Fund (MMIF)

FHA's Mutual Mortgage Insurance Fund absorbs any shortfall when HECM loan balances exceed net sale proceeds, protecting both borrowers and lenders.

Question 44: The NRMLA Code of Ethics applies to which of the following parties?

Only CRMP-certified professionals
Only company officers and senior management
All NRMLA member companies and their employees engaged in reverse mortgage activities (Correct answer)
Only originators, not processors or underwriters

Correct answer: All NRMLA member companies and their employees engaged in reverse mortgage activities

NRMLA's Code of Ethics covers all member firms and their staff involved in reverse mortgage transactions, not just designated professionals.

Question 45: The Good Faith Estimate (GFE) for a HECM loan must be provided to the borrower within how many business days of receiving a completed loan application?

5 business days
1 business day
3 business days (Correct answer)
7 business days

Correct answer: 3 business days

Under RESPA and TILA, lenders must deliver the GFE (now Loan Estimate under TRID) within 3 business days of a completed application.

Question 46: 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?

Evaluate the application based on the borrower's individual financial merits and the property's specific characteristics, without regard to neighborhood demographics. (Correct answer)
Increase the origination fee to compensate for the perceived property risk.
Advise the applicant that their neighborhood makes the loan riskier and suggest they apply for a smaller loan amount.
Inform the appraiser about the neighborhood's demographic composition to ensure they are aware of all factors.

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

The Fair Housing Act and Equal Credit Opportunity Act prohibit discrimination in lending, including the practice of 'redlining' or 'reverse redlining', where lending decisions are negatively influenced by the racial or ethnic composition of a neighborhood. The only ethical and legal course of action is to process the application based on the applicant's creditworthiness and the specific property's appraised value, completely disregarding neighborhood demographics.

Question 47: A manufactured home was built in 1975 and the borrower has owned it since 1980. Is it HECM-eligible?

Yes, if the borrower has lived there for more than 20 years
No, manufactured homes are never eligible for HECM financing
Yes, any manufactured home qualifies regardless of age
No, HUD requires manufactured homes to have been built on or after June 15, 1976 to meet HUD standards (Correct answer)

Correct answer: No, HUD requires manufactured homes to have been built on or after June 15, 1976 to meet HUD standards

HUD's Manufactured Home Construction and Safety Standards (HUD Code) took effect June 15, 1976; homes built before this date do not qualify.

Question 48: A client who is deaf requests in-person counseling with a sign language interpreter they will provide. The agency should:

Accommodate the request, ensuring the interpreter does not have a conflict of interest (Correct answer)
Decline and refer the client to telephone counseling as the only accessible option
Require the client to use the agency's own certified interpreter only
Provide written materials only, as interpreters create liability issues

Correct answer: Accommodate the request, ensuring the interpreter does not have a conflict of interest

Agencies must make reasonable accommodations for clients with disabilities, and a client-provided interpreter is acceptable provided there is no conflict of interest.

Question 49: What minimum age must ALL borrowers on the title meet to qualify for a HECM?

62 years old (Correct answer)
55 years old
65 years old
60 years old

Correct answer: 62 years old

All borrowers listed on the HECM must be at least 62 years of age at the time of loan closing to qualify.

Question 50: A borrower's adult child accompanies her to the counseling session and insists on answering questions on her behalf. What should the counselor do?

Redirect questions to the borrower directly and assess whether the borrower is participating freely (Correct answer)
End the session and require the borrower to return alone
Document that a third party was present and continue without intervention
Allow the adult child to act as the borrower's agent for the session

Correct answer: Redirect questions to the borrower directly and assess whether the borrower is participating freely

Counselors must ensure the borrower is an active, voluntary participant and not unduly influenced; redirecting questions helps assess this.

Question 51: Which scenario would cause a borrower to FAIL the residency requirement for a HECM?

Temporarily residing in a rehabilitation facility for 4 months
Renting a room in the home to a family member
Spending 7 months per year at the mortgaged property (Correct answer)
Vacationing abroad for 2 months each year

Correct answer: Spending 7 months per year at the mortgaged property

Borrowers must occupy the property as their primary residence, meaning they must live there the majority of the year; spending only 7 months could jeopardize that status depending on circumstances.

Question 52: How should a CRMP handle a borrower who speaks limited English and relies on a family member for translation?

Recommend the borrower seek a lender who speaks their language
Use a qualified independent translator or translated documents to ensure accurate communication (Correct answer)
Proceed if the borrower can sign their name in English
Accept the family member as an adequate translator to streamline the process

Correct answer: Use a qualified independent translator or translated documents to ensure accurate communication

Relying on interested family members for translation creates bias risk; independent translation protects borrower understanding.

Question 53: A CRMP is offered a gift worth $200 from a title company seeking reverse mortgage referrals. Under RESPA and NRMLA ethics, this is:

Allowed up to $250 per calendar year
Permissible if the gift is given after closing
Acceptable if disclosed to the borrower
Prohibited as it constitutes an illegal kickback (Correct answer)

Correct answer: Prohibited as it constitutes an illegal kickback

RESPA Section 8 prohibits kickbacks and unearned fees in settlement services; gifts in exchange for referrals are illegal regardless of timing.

Question 54: Which of the following best describes the HECM Maximum Claim Amount (MCA)?

The appraised value of the property regardless of FHA limits
The lesser of the appraised value, the purchase price (for purchase transactions), or the FHA loan limit (Correct answer)
The maximum monthly payment the lender will issue to the borrower
The total amount the borrower can receive over the life of the loan

Correct answer: The lesser of the appraised value, the purchase price (for purchase transactions), or the FHA loan limit

The MCA is the lesser of the appraised value or FHA mortgage limit, which serves as the cap on the property value used to calculate HECM proceeds.

Question 55: What is the current annual MIP rate charged on the outstanding HECM loan balance after closing?

2.00%
1.25%
0.50% (Correct answer)
0.25%

Correct answer: 0.50%

After closing, an annual MIP of 0.50% is charged on the outstanding loan balance throughout the life of the HECM.

Question 56: A CRMP counsels a borrower whose adult child is pressuring them to take out a reverse mortgage to fund the child's business. What is the ethical obligation?

Proceed if the borrower verbally agrees
Explore whether the decision is truly voluntary and in the borrower's best interest (Correct answer)
Recommend the largest available loan amount to satisfy both parties
Defer to the family member since they have financial expertise

Correct answer: Explore whether the decision is truly voluntary and in the borrower's best interest

CRMPs must ensure borrower decisions are free from undue influence and genuinely serve the borrower's interests.

Question 57: Which statement about the HECM for Purchase right of rescission is correct?

The right of rescission period is 5 business days for seniors
There is no right of rescission on a HECM for Purchase of a primary residence (Correct answer)
Borrowers have a 3-day right of rescission on HECM for Purchase transactions
Right of rescission applies only to the purchase price, not the reverse mortgage portion

Correct answer: There is no right of rescission on a HECM for Purchase of a primary residence

HECM for Purchase transactions are purchase money mortgages and therefore do not carry the standard 3-day right of rescission that refinances do.

Question 58: Under the Equal Credit Opportunity Act (ECOA), a lender may NOT deny a HECM application based on which factor?

The property failing to meet FHA guidelines
Insufficient home equity
The applicant's age being under 62
The applicant's race or national origin (Correct answer)

Correct answer: The applicant's race or national origin

ECOA prohibits credit discrimination based on race, color, religion, national origin, sex, marital status, or age (when the applicant is old enough to contract).

Question 59: At what point must a HECM borrower complete HUD-approved counseling?

After the loan closes but within 30 days of disbursement
Within 90 days after receiving the loan comparison worksheet
Only if the lender's Financial Assessment reveals credit problems
Before the loan application is submitted to the lender (Correct answer)

Correct answer: Before the loan application is submitted to the lender

HUD mandates that borrowers receive independent counseling from a HUD-approved agency before any loan application is submitted.

Question 60: Which of the following best describes the 'primary residence' requirement for HECM eligibility?

The borrower must have lived in the home for at least 10 consecutive years
The borrower may occupy a secondary vacation property as the qualifying residence
The borrower must occupy the property as their principal residence for at least 6 months per year (Correct answer)
The home must be in the same state where the borrower was born

Correct answer: The borrower must occupy the property as their principal residence for at least 6 months per year

HUD requires HECM borrowers to occupy the property as their principal residence, generally defined as living there more than half the year.

Question 61: A borrower is deciding between a fixed-rate HECM and an adjustable-rate HECM (ARM). They want the flexibility to access funds in the future as needed, rather than taking all the proceeds at closing. Which HECM product would be the most suitable choice?

A HECM for Purchase, as it's designed for flexibility.
An adjustable-rate HECM, because it offers a line of credit option. (Correct answer)
A fixed-rate HECM, because the interest rate never changes.
A fixed-rate HECM, because it allows for multiple draws over the life of the loan.

Correct answer: An adjustable-rate HECM, because it offers a line of credit option.

Adjustable-rate HECMs offer multiple payout options, including a line of credit that allows borrowers to draw funds as needed. In contrast, a fixed-rate HECM typically requires the borrower to take a single, lump-sum draw at closing.

Question 62: A CRMP learns that a colleague is falsifying borrower income information on HECM applications. Under NRMLA ethics, what should the CRMP do?

Continue working at the same firm without involvement
Ignore it since income is not verified on HECMs
Confront the colleague privately and take no further action
Report the conduct to NRMLA and/or the appropriate regulatory authority (Correct answer)

Correct answer: Report the conduct to NRMLA and/or the appropriate regulatory authority

CRMPs have an ethical obligation to report fraud and misconduct to NRMLA and regulatory authorities to protect consumers.

Question 63: What is the purpose of the expected average mortgage interest rate (AEI/Expected Rate) in HECM calculations?

It is used to calculate the principal limit at origination (Correct answer)
It is used exclusively for adjustable-rate HECMs
It sets the interest rate charged to the borrower each month
It determines the monthly service fee set-aside amount

Correct answer: It is used to calculate the principal limit at origination

The expected (average) interest rate is used in HUD's principal limit factor tables to determine how much a borrower can receive at origination.

Question 64: A borrower wishes to complete HECM counseling by telephone rather than in person. Under HUD guidelines, this is:

Permitted only with lender written approval
Permitted as an option available to all eligible borrowers (Correct answer)
Permitted only if the borrower lives more than 50 miles from a counselor
Prohibited — in-person counseling is always required

Correct answer: Permitted as an option available to all eligible borrowers

HUD allows telephone counseling as an option for all borrowers, not just those who live far from counseling agencies.

Question 65: A CRMP recommends a HECM to a borrower solely because it generates the highest commission. This violates which ethical principle?

Transparency
Confidentiality
Suitability and client-first duty (Correct answer)
Competence

Correct answer: Suitability and client-first duty

Suitability requires that product recommendations serve the borrower's needs, not the originator's financial interest.

Question 66: A borrower receives Social Security income of $1,800/month and part-time wages of $600/month. The part-time income has been received for only 14 months. How should the lender treat the part-time wages?

Exclude the wages because 24 months of history is required (Correct answer)
Include only 50% of the wages
Include the full $600 since any income counts
Average the wages over 14 months and include that figure

Correct answer: Exclude the wages because 24 months of history is required

Employment income typically requires a two-year history to be counted; 14 months does not meet that threshold.

Question 67: Which of the following income types is given the LEAST weight in a HECM financial assessment because it is not guaranteed to continue?

Part-time employment wages (Correct answer)
Pension distributions from a defined benefit plan
Social Security retirement benefits
Required Minimum Distributions from an IRA

Correct answer: Part-time employment wages

Part-time employment wages are considered less stable and least likely to continue long-term compared to fixed retirement income sources like Social Security or pensions.

Question 68: Under HUD's initial disbursement limit rule, what is the maximum percentage of the available principal limit a borrower may typically draw during the first 12 months?

100%
60% (Correct answer)
50%
75%

Correct answer: 60%

HUD regulations limit borrowers to drawing no more than 60% of their available principal limit during the first 12 months, or mandatory obligations plus 10%, whichever is greater.

Question 69: An originator discovers a borrower has an outstanding federal tax lien on the property. What is the MOST appropriate course of action?

Deny the loan without explanation
Advise the borrower the lien must be satisfied or subordinated at closing (Correct answer)
Proceed with the loan and ignore the lien
Recommend the borrower hide the lien from HUD

Correct answer: Advise the borrower the lien must be satisfied or subordinated at closing

Federal tax liens must be satisfied or properly subordinated before or at closing to ensure HECM eligibility and protect all parties.

Question 70: Which HECM program safeguard specifically requires that the counseling session address alternatives to a reverse mortgage?

The HUD Counseling Protocol (24 CFR Part 214) (Correct answer)
The TALC disclosure requirement
The Financial Assessment
The Non-Borrowing Spouse deferral rules

Correct answer: The HUD Counseling Protocol (24 CFR Part 214)

HUD's Housing Counseling Program regulations at 24 CFR Part 214 require that HECM counseling cover alternatives to reverse mortgages, such as refinancing, home equity loans, or public benefit programs.

Question 71: A HECM borrower's home sells for less than the outstanding loan balance. What protects the borrower's heirs from owing the deficiency?

The lender's private mortgage insurance policy
A mandatory deficiency waiver signed at closing
The borrower's estate assets must cover the shortfall
FHA's mutual mortgage insurance fund, making HECMs non-recourse loans (Correct answer)

Correct answer: FHA's mutual mortgage insurance fund, making HECMs non-recourse loans

HECMs are non-recourse loans insured by FHA, so heirs never owe more than the home's appraised value or sale price.

Question 72: Which of the following represents the CORRECT order of priority for HECM loan proceeds when mandatory obligations exist at closing?

LESA funded first, then mandatory obligations paid, then optional cash disbursed
Mandatory obligations first, then LESA, then optional cash to borrower (Correct answer)
All funds disbursed equally across all categories simultaneously
Optional cash first, then mandatory obligations, then LESA

Correct answer: Mandatory obligations first, then LESA, then optional cash to borrower

At HECM closing, mandatory obligations (existing mortgages, liens) are satisfied first, then the LESA is funded, and remaining proceeds are available to the borrower.

Question 73: Which of the following statements in a television advertisement for a HECM would be considered a prohibited, misleading practice?

"This is a government benefit that ensures you will never lose your home for any reason." (Correct answer)
"This FHA-insured loan allows you to access your home's equity."
"You must still pay your property taxes and homeowner's insurance."
"You can eliminate your monthly mortgage payment and improve your cash flow."

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

Describing a HECM as a 'government benefit' is highly misleading, as it is a loan that accrues debt and must be repaid. Furthermore, stating a borrower can 'never lose their home for any reason' is false; failure to pay property taxes, insurance, or maintain the home can lead to default and foreclosure. This type of language is a serious misrepresentation prohibited by FHA and FTC advertising rules.

Question 74: A HECM borrower currently on a line of credit wishes to switch to a tenure payment plan. What is the correct procedure?

Request a payment plan change through their loan servicer (Correct answer)
Apply for an entirely new HECM loan
Obtain a new property appraisal to confirm continued eligibility
Obtain new HUD-approved counseling before the change is permitted

Correct answer: Request a payment plan change through their loan servicer

Borrowers with adjustable-rate HECMs can request a payment plan change from their servicer at any time; this is a built-in flexibility feature of HECM products.

Question 75: A CRMP holds a CRMP designation from NRMLA. Which conduct would put that designation at risk?

Disclosing all compensation received from lenders
Engaging in undisclosed dual agency by representing both borrower and lender interests (Correct answer)
Completing continuing education requirements on time
Referring clients to HUD-approved counselors before closing

Correct answer: Engaging in undisclosed dual agency by representing both borrower and lender interests

Undisclosed dual agency violates loyalty and impartiality requirements that underpin the CRMP designation.

Question 76: Which of the following credit events typically triggers a 'compensating factors' review rather than automatic disqualification during HECM financial assessment?

Active bankruptcy proceedings
An unpaid federal tax lien with no repayment plan
Current delinquency on a federal debt
A single 30-day late mortgage payment 15 months ago (Correct answer)

Correct answer: A single 30-day late mortgage payment 15 months ago

A single isolated late payment outside the 12-month look-back window may be addressed with compensating factors rather than causing automatic adverse action.

Question 77: A borrower's home has been cited for health and safety deficiencies in the FHA appraisal. What must happen before the HECM closes?

The borrower must obtain private mortgage insurance to cover the deficiencies
Required repairs must be completed and re-inspected, or repair set-asides must be established at closing (Correct answer)
The appraised value is simply reduced and the loan proceeds accordingly
The borrower must sell the property and purchase a qualifying home instead

Correct answer: Required repairs must be completed and re-inspected, or repair set-asides must be established at closing

FHA requires that health-and-safety repair items be addressed either before closing or through an escrow/set-aside arrangement managed by the servicer.

Question 78: Which entity is primarily responsible for enforcing compliance with the Truth in Lending Act (TILA) for HECM lenders?

Federal Reserve Board
HUD Office of Inspector General
Consumer Financial Protection Bureau (CFPB) (Correct answer)
Office of the Comptroller of the Currency only

Correct answer: Consumer Financial Protection Bureau (CFPB)

The CFPB has primary authority to supervise and enforce TILA compliance for mortgage lenders, including those offering HECMs.

Question 79: Under HECM servicing rules, within how many days must the servicer begin foreclosure action after a due-and-payable condition has been established and the grace period has passed?

60 days
HUD must authorize foreclosure; no set timeline applies
6 months (Correct answer)
30 days

Correct answer: 6 months

Servicers must typically initiate foreclosure within 6 months of the due-and-payable date, with extensions available upon HUD approval.

Question 80: Which federal law primarily governs reverse mortgage disclosures?

Home Mortgage Disclosure Act
Real Estate Settlement Procedures Act
Truth in Lending Act (Correct answer)
Fair Credit Reporting Act

Correct answer: Truth in Lending Act

The Truth in Lending Act (TILA), implemented by Regulation Z, is a federal law designed to protect consumers in credit transactions by requiring clear disclosure of key loan terms and costs. For reverse mortgages, TILA mandates that lenders provide detailed information about the Annual Percentage Rate (APR), finance charges, and other essential terms, enabling borrowers to make informed decisions.

Question 81: A HECM borrower moves out of the property for more than 12 consecutive months due to a medical condition. What is the disclosure requirement at loan origination regarding this scenario?

The lender must disclose a 6-month absence threshold that triggers default
The lender must disclose that extended absence beyond 12 months triggers a due-and-payable event (Correct answer)
The counselor must advise the borrower that medical absences of any length void the loan
No disclosure is required because medical absences are always exempt

Correct answer: The lender must disclose that extended absence beyond 12 months triggers a due-and-payable event

Borrowers must be told at counseling and closing that if the property is not their primary residence for more than 12 consecutive months, the loan becomes due and payable.

Question 82: A borrower has a property tax default that was resolved 18 months ago. How should the counselor treat this during financial assessment?

Ignore it since it was resolved more than 12 months ago
Automatically require a LESA for the borrower
Document it as a resolved derogatory credit event and evaluate the cause (Correct answer)
Disqualify the borrower from HECM eligibility

Correct answer: Document it as a resolved derogatory credit event and evaluate the cause

Resolved tax defaults must be documented and analyzed for cause; they do not automatically require a LESA or disqualify the borrower.

Question 83: Under the Fair Housing Act, which practice is prohibited in the marketing of reverse mortgages?

Focusing marketing on homeowners with high equity
Advertising HECM products in Spanish-language media
Targeting advertisements to seniors over 62
Steering eligible borrowers away from products based on race (Correct answer)

Correct answer: Steering eligible borrowers away from products based on race

The Fair Housing Act prohibits steering—directing borrowers toward or away from products based on protected class characteristics such as race.

Question 84: A borrower is 68 years old and owns a home with a remaining mortgage balance. How does this affect HECM eligibility?

Existing mortgage balances automatically disqualify any HECM applicant
The borrower is ineligible because the home must be owned free and clear
The borrower may be eligible; the reverse mortgage proceeds must first pay off the existing mortgage (Correct answer)
The borrower must wait until age 70 to apply if a mortgage balance remains

Correct answer: The borrower may be eligible; the reverse mortgage proceeds must first pay off the existing mortgage

Existing mortgages do not disqualify a borrower; HECM proceeds are used to satisfy outstanding liens at closing.

Question 85: Which of the following best describes the purpose of the HECM Financial Interview Tool (FIT) used by counselors?

To help counselors assess the borrower's financial situation and ability to meet ongoing loan obligations (Correct answer)
To determine the borrower's credit score for underwriting
To verify the borrower's age and property ownership
To calculate the exact principal limit the borrower will receive

Correct answer: To help counselors assess the borrower's financial situation and ability to meet ongoing loan obligations

The FIT guides counselors in evaluating whether the borrower can sustain property charges and meet loan obligations after closing.

Question 86: What must a borrower do to maintain HECM eligibility on an ongoing basis after closing?

Make minimum monthly interest payments to the servicer
Continue paying property taxes, homeowners insurance, and maintain the property (Correct answer)
Submit annual income verification forms to HUD
Requalify financially every five years through updated Financial Assessment

Correct answer: Continue paying property taxes, homeowners insurance, and maintain the property

HECM borrowers must remain current on property taxes, homeowners insurance, and property maintenance throughout the life of the loan.

Question 87: What is the initial draw limit rule for a fixed-rate HECM?

Borrowers must draw the full Principal Limit at closing (Correct answer)
Borrowers may draw any amount up to the full Principal Limit at closing
Borrowers are limited to 60% of the Principal Limit or enough to pay mandatory obligations plus 10%, whichever is greater
There is no draw limit on fixed-rate HECMs

Correct answer: Borrowers must draw the full Principal Limit at closing

Fixed-rate HECM borrowers must take the full lump sum at closing, which equals the entire Principal Limit amount.

Question 88: How should a HECM counselor handle a situation where a client's adult children are pressuring them NOT to get a reverse mortgage due to inheritance concerns?

Explain to the client how a HECM affects home equity and inheritance, but affirm that the final decision belongs to the client (Correct answer)
Side with the family since protecting the estate is always in the client's best interest
Advise the client to postpone the decision until family agreement is reached
Invite the adult children to attend the session so their objections can be formally documented

Correct answer: Explain to the client how a HECM affects home equity and inheritance, but affirm that the final decision belongs to the client

Counselors must remain neutral and ensure the client understands how the loan affects their estate, while reinforcing that the borrowing decision is the client's alone to make.

Question 89: An 80-year-old borrower with early-stage dementia wants to proceed with a HECM. The most appropriate ethical step is:

Require a physician's letter then continue normally
Have the borrower's adult child sign on their behalf immediately
Pause and recommend the borrower obtain a legal guardian or power of attorney review before proceeding (Correct answer)
Obtain only the standard application signature and proceed

Correct answer: Pause and recommend the borrower obtain a legal guardian or power of attorney review before proceeding

Cognitive impairment raises capacity concerns; a CRMP should recommend legal safeguards such as a guardian or attorney review before any loan is executed.

Question 90: A HECM borrower has a $200,000 principal limit and mandatory obligations totaling $130,000. What is the maximum amount the borrower may draw in the first 12 months?

$130,000, because only the mandatory obligations amount is permitted
$140,000, because mandatory obligations plus 10% of the principal limit exceed 60% (Correct answer)
$200,000, because mandatory obligations override all limits
$120,000, because the 60% limit applies

Correct answer: $140,000, because mandatory obligations plus 10% of the principal limit exceed 60%

The borrower may draw $140,000 ($130,000 in mandatory obligations plus $20,000, which is 10% of $200,000), since this exceeds the standard 60% cap of $120,000.

Question 91: When a Life Expectancy Set-Aside (LESA) is required after Financial Assessment, how are property charge payments handled?

A portion of the Principal Limit is set aside and the servicer pays property charges on the borrower's behalf (Correct answer)
The borrower continues to pay property charges independently from personal funds
The lender pays property charges and adds them as a separate lien on the property
The borrower deposits funds into an escrow account managed by HUD

Correct answer: A portion of the Principal Limit is set aside and the servicer pays property charges on the borrower's behalf

A LESA reserves a calculated portion of the Principal Limit from which the servicer disburses property taxes and insurance premiums directly, removing the risk of borrower non-payment.

Question 92: During client assessment, a CRMP discovers the borrower receives SSI benefits. What concern should the professional raise?

SSI income cannot be counted as stable income in the financial assessment
SSI recipients are categorically excluded from HECM programs
HECM disbursements could affect SSI means-tested benefit eligibility if funds are not spent within the same month (Correct answer)
HECM proceeds are always counted as income by the SSI program

Correct answer: HECM disbursements could affect SSI means-tested benefit eligibility if funds are not spent within the same month

SSI is means-tested, so unspent HECM funds held in a bank account beyond the month of receipt can be counted as a resource and may reduce or eliminate SSI benefits.

Question 93: When a borrower asks a CRMP to rush the process so counseling happens on the same day as the application signing, the CRMP must explain that:

The counselor can issue an expedited certificate for an additional fee
Same-day completion is allowed if the borrower waives the waiting period in writing
HUD requires a minimum 7-business-day waiting period between counseling and application signing (Correct answer)
The lender can override the waiting period for financial hardship cases

Correct answer: HUD requires a minimum 7-business-day waiting period between counseling and application signing

HUD's mandatory waiting period of 7 business days between counseling and application signing cannot be waived by the borrower or lender.

Question 94: What is required before a borrower can obtain a reverse mortgage?

A credit score of over 700.
Completion of counseling with a HUD-approved counselor (Correct answer)
An appraisal only.
Proof of recent employment.

Correct answer: Completion of counseling with a HUD-approved counselor

Before a borrower can obtain a reverse mortgage, federal regulations mandate the completion of a counseling session with a HUD-approved counselor. This crucial step ensures that prospective borrowers fully understand the product's features, risks, costs, and alternatives. It serves as a vital consumer protection measure, empowering borrowers to make informed decisions.

Question 95: What happens to an unused HECM line of credit balance over time?

It is forfeited after 12 months of non-use
It grows at the same rate as the loan's interest rate plus MIP (Correct answer)
It remains static regardless of market conditions
It decreases as the loan balance grows

Correct answer: It grows at the same rate as the loan's interest rate plus MIP

The unused HECM line of credit grows at the current interest rate plus the 0.5% annual MIP rate.

Question 96: During a HECM financial assessment, the lender discovers the borrower has an outstanding federal tax lien. What is required?

The lien must be paid in full before or at closing, or a repayment plan must be in place (Correct answer)
The loan is automatically denied
A LESA must be established equal to the lien amount
The lien can be ignored if it is under $5,000

Correct answer: The lien must be paid in full before or at closing, or a repayment plan must be in place

Federal tax liens must be satisfied at or before closing, or the borrower must have an approved IRS repayment agreement in place.

Question 97: Under NRMLA's Code of Ethics, a CRMP is prohibited from doing which of the following?

Explaining loan comparisons to a borrower
Accepting referral fees from non-licensed third parties outside RESPA safe harbors (Correct answer)
Disclosing total loan costs in writing
Recommending independent legal review

Correct answer: Accepting referral fees from non-licensed third parties outside RESPA safe harbors

NRMLA's Code of Ethics prohibits kickbacks and referral arrangements that violate RESPA and ethical standards.

Question 98: What is the maximum origination fee a lender may charge on a HECM with a home value of $200,000?

$2,500 (Correct answer)
$6,000
$4,000
$2,000

Correct answer: $2,500

For homes valued at $125,000 or less the cap is $2,500; for homes above $125,000 the fee is 2% of the first $200,000, which equals $4,000, but the minimum floor is $2,500—so the answer for a $200,000 home is $4,000.

Question 99: Which of the following best describes the counselor's obligation regarding elder financial exploitation?

Counselors have no legal obligation to report suspected exploitation
Only licensed social workers can report suspected financial exploitation
Counselors should be aware of signs of exploitation and follow applicable state mandatory reporting laws (Correct answer)
Counselors should note concerns in the file but take no external action

Correct answer: Counselors should be aware of signs of exploitation and follow applicable state mandatory reporting laws

HECM counselors must be trained to recognize signs of elder financial exploitation and comply with their state's mandatory reporting requirements where applicable.

Question 100: When evaluating rental income from a multi-unit property for a HECM financial assessment, how much of the gross rental income is typically counted?

50% of gross rental income
90% of gross rental income
100% of gross rental income
75% of gross rental income (Correct answer)

Correct answer: 75% of gross rental income

HUD typically allows 75% of gross rental income to account for vacancies and maintenance expenses when calculating effective income.

Certified Reverse Mortgage Professional (CRMP) Exam

The CRMP certification validates a professional's expertise and commitment to ethical practices in the reverse mortgage industry.

100

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120 min

Time Limit

75%

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