Ethics and Counseling Requirements 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 Ethics and Counseling Requirements flashcards as text
What is the maximum counseling fee a HUD-approved agency may charge a HECM applicant who cannot afford to pay?
Answer: $0 — the fee must be waived
HUD requires that counseling agencies waive the fee for borrowers who cannot afford it; inability to pay cannot be a barrier to counseling.
Under NRMLA's Code of Ethics, a CRMP is prohibited from doing which of the following?
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.
A CRMP recommends a HECM to a borrower solely because it generates the highest commission. This violates which ethical principle?
Answer: Suitability and client-first duty
Suitability requires that product recommendations serve the borrower's needs, not the originator's financial interest.
Which of the following is a permissible reason for a borrower to conduct HECM counseling by telephone rather than in person?
Answer: The borrower lives in a rural area without reasonable access to a local counselor
Telephone counseling is permitted when in-person counseling is not reasonably available, such as in rural or underserved areas.
How does NRMLA's Code of Ethics address confidentiality of borrower information?
Answer: Member firms must protect non-public personal information and use it only for the intended transaction
NRMLA's ethical standards require members to safeguard borrower data in compliance with Gramm-Leach-Bliley and related privacy laws.
A CRMP learns that a colleague is falsifying borrower income information on HECM applications. Under NRMLA ethics, what should the CRMP do?
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.
What must a HECM counselor discuss regarding property taxes and insurance during the counseling session?
Answer: The borrower's obligation to pay taxes and insurance and the consequences of default
Counselors must explain that failure to pay property taxes and homeowners insurance can trigger loan default and foreclosure.