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 is 68 years old and owns a home with a $40,000 remaining mortgage balance valued at $280,000. What must occur before HECM proceeds can be accessed?
Answer: The existing mortgage must be paid off at or before closing
HECM requires a first-lien position, so any existing mortgage or lien must be paid off at or prior to closing, typically from HECM proceeds.
Which scenario would cause a borrower to FAIL the residency requirement for a HECM?
Answer: Spending 7 months per year at the mortgaged property
Borrowers must occupy the property as their primary residence, meaning they must live there the majority of the year; spending only 7 months could jeopardize that status depending on circumstances.
When assessing a married couple for a HECM, one spouse is 72 and the other is 59. How does this affect eligibility?
Answer: Only the 72-year-old can be on the loan; the 59-year-old is an eligible non-borrowing spouse
The spouse under 62 cannot be a borrower but may qualify as an eligible non-borrowing spouse with specific protections if properly disclosed.
A client discloses they have a federal tax lien on their property. What is the likely impact on HECM eligibility?
Answer: The lien must be resolved or subordinated before the HECM can close
Federal tax liens affect title and must be resolved, paid off, or formally subordinated to allow the HECM to hold first-lien position.
Under the HECM financial assessment, which factor is NOT evaluated by the lender?
Answer: The borrower's credit score threshold of 700 or higher
HECM financial assessment does not use a minimum credit score cutoff; it evaluates credit history, property charge payment history, and residual income instead.
A borrower has a manufactured home built in 1974. Which statement best describes HECM eligibility for this property?
Answer: It is ineligible because manufactured homes must have been built on or after June 15, 1976
HUD requires manufactured homes to have been built on or after June 15, 1976 (meeting HUD standards), so a 1974 home does not qualify.
During client assessment, a CRMP discovers the borrower receives SSI benefits. What concern should the professional raise?
Answer: HECM disbursements could affect SSI means-tested benefit eligibility if funds are not spent within the same month
SSI is means-tested, so unspent HECM funds held in a bank account beyond the month of receipt can be counted as a resource and may reduce or eliminate SSI benefits.