Practice Test Geeks(CRMP) Certified Reverse Mortgage Professional Practice Test
← All CRMP Flashcard Decks

HECM Program and Products 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 HECM Program and Products flashcards as text

  1. What distinguishes a HECM Standard from a HECM Saver (the historical product distinction before 2017 program changes)?

    Answer: HECM Saver had a lower upfront MIP but offered a reduced Principal Limit

    The HECM Saver charged a minimal upfront MIP (0.01%) but provided a lower Principal Limit, while HECM Standard charged 2% upfront with a higher Principal Limit.

  2. A HECM borrower in a modified term payment plan receives monthly payments AND maintains a line of credit. If the borrower draws from the line of credit, what happens to the monthly payments?

    Answer: Monthly payments continue unchanged; only the line of credit balance is reduced

    In a modified term plan, the scheduled monthly payments continue unaffected by line of credit draws; the two components are independent within the available Principal Limit.

  3. Which statement accurately describes how property taxes affect HECM eligibility in states with homestead exemptions?

    Answer: Tax deferrals must be subordinated to the HECM lien to proceed

    Property tax deferral programs that create a lien on the property must be subordinated to the HECM first lien to allow the loan to proceed.

  4. 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?

    Answer: 6 months

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

  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?

    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.

  6. What is a 'repair set-aside' in the context of a HECM closing?

    Answer: Funds withheld from loan proceeds to ensure required property repairs are completed after closing

    When an appraisal identifies required repairs, a repair set-aside withholds 1.5 times the estimated repair cost from proceeds until repairs are verified as complete.

  7. Which best describes the 'expected rate' used in HECM Principal Limit calculations for adjustable-rate products?

    Answer: The 10-year CMT or SOFR rate plus the lender's margin

    For adjustable-rate HECMs, the expected rate equals the 10-year Constant Maturity Treasury (or equivalent SOFR swap rate) plus the lender's margin at the time of application.