Client Assessment and Eligibility 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 Client Assessment and Eligibility flashcards as text
A borrower has recently filed for Chapter 7 bankruptcy and the discharge is pending. What is the impact on HECM eligibility?
Answer: The HECM may proceed after discharge, but the bankruptcy must be reviewed as part of the financial assessment
A bankruptcy discharge resolves most credit obligations, and HECMs can generally proceed after discharge with the event reviewed in the financial assessment for context.
Which of the following best describes the HECM Maximum Claim Amount (MCA)?
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.
A borrower aged 73 wants to add their 45-year-old non-spouse partner to the HECM. What should the CRMP explain?
Answer: The partner cannot be added as a borrower since they are under 62 and is not eligible as a non-borrowing spouse
Non-borrowing spouse protections apply only to legal spouses; a non-spouse partner under 62 cannot be a borrower or receive deferral protections.
During client assessment, a CRMP learns the borrower co-owns the property with a sibling who is 55 years old. What is the eligibility concern?
Answer: All titleholders must be HECM borrowers, and the sibling at 55 is below the minimum age of 62
All individuals on title to the property must be borrowers on the HECM, and all borrowers must be at least 62, so the 55-year-old sibling must either be removed from title or wait.
A CRMP is assessing a client in a state with a homestead exemption that limits the ability to place a lien on the property. What step should be taken?
Answer: Consult with a title attorney to ensure the state's homestead laws allow a valid first-lien HECM to be recorded
State homestead laws vary and can complicate lien placement; legal review is necessary to confirm the HECM lien can be properly recorded and enforced.
When performing a HECM suitability assessment, which situation best warrants recommending against a HECM?
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.
A borrower's home is located in a Special Flood Hazard Area (SFHA). What is required for HECM eligibility?
Answer: The borrower must obtain and maintain flood insurance as a condition of the HECM
Properties in Special Flood Hazard Areas must carry adequate flood insurance coverage as a mandatory ongoing obligation of the HECM borrower.