CRMP CRMP Loan Servicing and Post-Closing Requirements Questions and Answers 2

Question 1

What document must a HECM servicer send annually to notify the borrower that the loan is still active?

Accepted Answer

Annual Occupancy Certification

Answer

Loan Modification Agreement

Answer

Annual Percentage Rate Disclosure

Answer

Mortgage Statement of Account

Question 2

Under a HECM tenure payment plan, what happens to monthly payments if the borrower outlives the original loan term estimate?

Accepted Answer

Payments continue for life as long as the borrower occupies the home

Answer

Payments stop automatically

Answer

The servicer recalculates payments at a lower amount

Answer

The borrower must reapply for additional funds

Question 3

What is the primary purpose of a Life Expectancy Set-Aside (LESA) in HECM servicing?

Accepted Answer

To reserve funds to pay future property taxes and insurance

Answer

To fund life insurance premiums for the borrower

Answer

To cover closing costs over the loan's life

Answer

To protect the lender against interest rate increases

Question 4

If a borrower wants to change their HECM payment plan from a line of credit to monthly tenure payments, what must they do?

Accepted Answer

Submit a payment plan change request to the servicer

Answer

Refinance the existing HECM

Answer

Obtain new FHA counseling

Answer

Re-qualify based on current underwriting guidelines

Question 5

What is the key difference between a full LESA and a partial LESA in HECM underwriting?

Accepted Answer

A full LESA is funded entirely from loan proceeds; a partial LESA requires the borrower to contribute

Answer

A full LESA covers all property charges; a partial LESA covers only insurance

Answer

A full LESA is mandatory; a partial LESA is optional

Answer

A full LESA applies only to fixed-rate loans

Question 6

Which entity is responsible for assigning a HECM to HUD when the loan balance reaches 98% of the Maximum Claim Amount?

Accepted Answer

The loan servicer

Answer

The borrower

Answer

The original lender

Answer

The FHA counselor