Practice Test Geeks(CRMP) Certified Reverse Mortgage Professional Practice Test
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Application and Origination Flashcards

7 cards from real CRMP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Application and Origination flashcards as text

  1. Under FHA Financial Assessment requirements, what are the two main factors a lender evaluates to determine a borrower's willingness and capacity to meet loan obligations?

    Answer: Credit history and residual income

    Financial Assessment examines credit history (willingness to pay) and residual income (capacity to pay) to determine if a LESA is needed.

  2. A HECM borrower chooses the fixed-rate option. Which disbursement plan is available to them?

    Answer: Single lump sum disbursement only

    Fixed-rate HECMs are only available with the single-disbursement lump-sum payment option, unlike adjustable-rate HECMs which offer multiple plans.

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

    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.

  4. Which scenario would trigger a maturity event requiring immediate repayment of a HECM?

    Answer: The last surviving borrower permanently moves to an assisted living facility

    A HECM becomes due when the last surviving borrower permanently moves out of the property, which includes relocation to a nursing home or assisted living for more than 12 consecutive months.

  5. When a HECM appraiser identifies needed repairs during the appraisal, how are those repairs typically handled?

    Answer: Funds for required repairs are set aside in a Repair Set-Aside from loan proceeds

    HUD allows a Repair Set-Aside to be withheld from loan proceeds to ensure required repairs are completed after closing.

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

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    LIBOR was the traditional index for ARM HECMs; it has since been replaced by SOFR following the global LIBOR phase-out.

  7. What is the role of the HECM counselor regarding the loan terms offered by the lender?

    Answer: The counselor explains options independently but does not endorse the lender's specific offer

    HECM counselors are independent and provide unbiased education about all available options, but they do not endorse or approve any specific lender's terms.