Practice Exam #9
1. All of the following are true regarding the counselor who meets with a prospective borrower for a reverse mortgage, except:
A. The counselor explains the cost of the loan and the financial implications of obtaining it.
B. The counselor is paid only if the borrower goes through with the reverse mortgage.
C. At the end of the session, the counselor will provide a required certification of counseling.
D. The counselor will provide guidance and advice on selecting a lender for the reverse mortgage.
A. The counselor explains the cost of the loan and the financial implications of obtaining it.
B. The counselor is paid only if the borrower goes through with the reverse mortgage.
C. At the end of the session, the counselor will provide a required certification of counseling.
D. The counselor will provide guidance and advice on selecting a lender for the reverse mortgage.
answer
The correct answer is B. The counselor is unbiased and independent, and his/her compensation is not dependent on any decision the borrower makes.
2. All of the following are true regarding the amount that can be borrowed on a reverse mortgage, except:
A. The more the home is worth, the more cash can be borrowed.
B. The younger the borrower is, the more he/she can borrow because he/she has longer to pay it back.
C. The more equity that has been built up, the more cash can be borrowed.
D. The location of the home and the particular program that has been selected will determine how much money can be borrowed.
A. The more the home is worth, the more cash can be borrowed.
B. The younger the borrower is, the more he/she can borrow because he/she has longer to pay it back.
C. The more equity that has been built up, the more cash can be borrowed.
D. The location of the home and the particular program that has been selected will determine how much money can be borrowed.
answer
The correct answer is B. Typically, the principal limit is higher for an older borrower because the shorter the life expectancy, the quicker the loan can be repaid.
3. Which of the following is the most common use of funds from a reverse mortgage:
A. To supplement a fixed retirement income.
B. To cover costs of healthcare.
C. To make home improvements.
D. All of the above are common uses of proceeds from reverse mortgages.
A. To supplement a fixed retirement income.
B. To cover costs of healthcare.
C. To make home improvements.
D. All of the above are common uses of proceeds from reverse mortgages.
answer
The correct answer is D. These are the common uses of the proceeds, but they can be used for virtually anything.
4. When can the interest that a lender charges for a reverse mortgage be deducted on a borrower’s income tax return?
A. At the inception of the loan.
B. After the first complete year of the loan term.
C. When the loan principal and interest are repaid.
D. Interest is not deductible on a reverse mortgage.
A. At the inception of the loan.
B. After the first complete year of the loan term.
C. When the loan principal and interest are repaid.
D. Interest is not deductible on a reverse mortgage.
answer
The correct answer is C. Yes, at the end of the term on a reverse mortgage.
5. When is the typical reverse mortgage due and payable?
A. When the borrower dies.
B. When the borrower sells the house.
C. When the borrower ceases to live in the house for 12 consecutive months.
D. All of the above.
A. When the borrower dies.
B. When the borrower sells the house.
C. When the borrower ceases to live in the house for 12 consecutive months.
D. All of the above.
ANSWER
The correct answer is D. Yes, these are typically the occasions when the borrower must repay the loan.
6. Payoff of a reverse mortgage includes which of the following:
A. The loan amount.
B. Any unpaid insurance that is due.
C. Any outstanding fees as stipulated in the loan.
D. All of the above.
A. The loan amount.
B. Any unpaid insurance that is due.
C. Any outstanding fees as stipulated in the loan.
D. All of the above.
ANSWER
The correct answer is D. Yes, all of these are to be repaid as stipulated in the loan. However, most closing costs and fees are paid upfront as the loan is established.
7. All of the following are true regarding a reverse mortgage, except:
A. A lender can force a borrower out of the home only if the borrower fails to make three consecutive payments.
B. A lender cannot sell a home subject to a reverse mortgage when the loan becomes due.
C. In the event of death, the lender usually allows 12 months for payment.
D. When payment is due, if the home is not sold or deeded to the lender, the lender can foreclose.
A. A lender can force a borrower out of the home only if the borrower fails to make three consecutive payments.
B. A lender cannot sell a home subject to a reverse mortgage when the loan becomes due.
C. In the event of death, the lender usually allows 12 months for payment.
D. When payment is due, if the home is not sold or deeded to the lender, the lender can foreclose.
ANSWER
The correct answer is A. The borrower is not making payments, remember?
8. In a reverse mortgage, under which of the following circumstances could the lender require immediate payment:
A. A government entity claims eminent domain over the property.
B. The homeowner fails to pay the property taxes on the home.
C. The homeowner fails to keep the property insured with hazard insurance.
D. All of the above.
A. A government entity claims eminent domain over the property.
B. The homeowner fails to pay the property taxes on the home.
C. The homeowner fails to keep the property insured with hazard insurance.
D. All of the above.
ANSWER
The correct answer is D. Yes, any of these situations would allow the lender to demand immediate payment.
9. The Truth in Lending Act requires certain disclosures for a reverse mortgage. All of the following would be included in those disclosures, except:
A. A good-faith projection of total annual loan cost rates.
B. A Loan Estimate.
C. An itemization of pertinent information.
D. An explanation of the table of total annual loan cost rates.
A. A good-faith projection of total annual loan cost rates.
B. A Loan Estimate.
C. An itemization of pertinent information.
D. An explanation of the table of total annual loan cost rates.
ANSWER
The correct answer is B. A Loan Estimate is not required for a reverse mortgage.
10. In a reverse mortgage, TILA requires which of the following regarding disclosure in the area of payments to the consumer.
A. Any advance to the consumer must be disclosed.
B. Any costs of an annuity and annuity payments must be disclosed.
C. Regular payments to the consumer must be disclosed.
D. All of the above.
A. Any advance to the consumer must be disclosed.
B. Any costs of an annuity and annuity payments must be disclosed.
C. Regular payments to the consumer must be disclosed.
D. All of the above.
ANSWER
The correct answer is D. According to TILA, all of this must be disclosed.
11. Which of the following would have to be disclosed to a borrower on a reverse mortgage:
A. All costs, including the cost of an annuity if purchased by the borrower.
B. Additional creditor compensation, if any.
C. Limitations on consumer liability, if applicable.
D. All of the above.
A. All costs, including the cost of an annuity if purchased by the borrower.
B. Additional creditor compensation, if any.
C. Limitations on consumer liability, if applicable.
D. All of the above.
ANSWER
The correct answer is D. You can figure that all material facts will have to be disclosed.
12. All of the following are true regarding actuarial life expectancy and reverse mortgages, except:
A. The actuarial life expectancy of the consumer should be calculated as of his/her latest birthday.
B. Two years is the assumed loan period.
C. In the case of multiple borrowers, the actuarial life expectancy is based on the life of the oldest borrower.
D. The actuarial life expectancy is to be multiplied by a factor of 1.4 rounded to the nearest full year.
A. The actuarial life expectancy of the consumer should be calculated as of his/her latest birthday.
B. Two years is the assumed loan period.
C. In the case of multiple borrowers, the actuarial life expectancy is based on the life of the oldest borrower.
D. The actuarial life expectancy is to be multiplied by a factor of 1.4 rounded to the nearest full year.
ANSWER
The correct answer is C. Actually, actuarial life expectancy is based on the life of the youngest borrower.
13. Creditors shall furnish TILA-required disclosures for reverse mortgages in which of the following manners:
A. Three days before closing.
B. Three business days before closing a closed-end credit transaction.
C. Three business days before closing the first transaction of an open-end credit plan.
D. Either B or C.
A. Three days before closing.
B. Three business days before closing a closed-end credit transaction.
C. Three business days before closing the first transaction of an open-end credit plan.
D. Either B or C.
ANSWER
The correct answer is D.
14. How do Home Equity Conversion Mortgages (HECMs) differ from standard reverse mortgages regarding basic features?
A. With a HECM loan, the minimum age is 60.
B. With a HECM loan, the property must be unencumbered.
C. With a HECM loan, there are no income or credit requirements.
D. Regarding basic features, HECMs and standard reverse mortgages are about the same.
A. With a HECM loan, the minimum age is 60.
B. With a HECM loan, the property must be unencumbered.
C. With a HECM loan, there are no income or credit requirements.
D. Regarding basic features, HECMs and standard reverse mortgages are about the same.
answer
The correct answer is D. HECM loans, of course, are insured by FHA for the protection of the approved lender.
15. Which of the following is true regarding a HECM loan:
A. It is a federally insured private loan.
B. It is a federally insured public loan.
C. It is safe for the lender, not necessarily the borrower.
D. HUD introduced the HECM loan in November, 1995.
A. It is a federally insured private loan.
B. It is a federally insured public loan.
C. It is safe for the lender, not necessarily the borrower.
D. HUD introduced the HECM loan in November, 1995.
answer
The correct answer is A.
16. How do Home Equity Conversion Mortgages (HECMs) differ from standard reverse mortgages regarding eligible properties?
A. Condos are eligible in standard reverse mortgages and HECMs; PUDs are eligible only with HECMs.
B. Single family one-unit dwellings are eligible in standard reverse mortgages and HECMs; 1-4 owner occupied residential properties are eligible with HECMs.
C. Mobile homes are not eligible in standard reverse mortgages; they are with HECMs if on a permanent foundation.
D. Both B and C.
A. Condos are eligible in standard reverse mortgages and HECMs; PUDs are eligible only with HECMs.
B. Single family one-unit dwellings are eligible in standard reverse mortgages and HECMs; 1-4 owner occupied residential properties are eligible with HECMs.
C. Mobile homes are not eligible in standard reverse mortgages; they are with HECMs if on a permanent foundation.
D. Both B and C.
answer
The correct answer is D. Co-op apartments are not eligible for standard reverse mortgages or HECMs.
17. What is FHA’s definition of the maximum claim amount on a HECM reverse mortgage?
A. Greater of the appraised value or sales price of the property.
B. Lesser of the appraised value or sales price of the property.
C. National minimum loan limit established under Section 305(a)(2) of the Federal Home Loan Mortgage Corporation Act for a one-family residence.
D. 80% of market value according to a HUD-approved appraiser.
A. Greater of the appraised value or sales price of the property.
B. Lesser of the appraised value or sales price of the property.
C. National minimum loan limit established under Section 305(a)(2) of the Federal Home Loan Mortgage Corporation Act for a one-family residence.
D. 80% of market value according to a HUD-approved appraiser.
answer
The correct answer is B. Yes, mortgage insurance rates are charged based on the lesser of appraised value or sales price. With a HECM loan, there is initially no sale of the property.
18. HECM payment options include all of the following, except:
A. Tenure.
B. Term.
C. Graduated Payment Plan (GPP).
D. Line of credit.
A. Tenure.
B. Term.
C. Graduated Payment Plan (GPP).
D. Line of credit.
answer
The correct answer is C.
19. Which of the following best describes the “tenure” HECM payment option:
A. Equal monthly payments for a fixed number of months.
B. Equal monthly payments for as long as at least one borrower lives and continues to occupy the home as a primary residence, subject to the principal limit.
C. Equal monthly payments with a loan advance option.
D. Shared appreciation with the lender.
A. Equal monthly payments for a fixed number of months.
B. Equal monthly payments for as long as at least one borrower lives and continues to occupy the home as a primary residence, subject to the principal limit.
C. Equal monthly payments with a loan advance option.
D. Shared appreciation with the lender.
answer
The correct answer is B. Yes, this is a good description of the “tenure” HECM payment option.
20. Which of the following represents a unique feature of the HECM loan program:
A. Shared appreciation with the lender.
B. Equal monthly payments for a fixed period of time.
C. Cash growth opportunities of the line of credit.
D. Equal monthly payments for the term of the loan.
A. Shared appreciation with the lender.
B. Equal monthly payments for a fixed period of time.
C. Cash growth opportunities of the line of credit.
D. Equal monthly payments for the term of the loan.
answer
The correct answer is C. As the credit line grows over time, the amount of cash available increases by the same total rate being charged on the loan balance until the borrower withdraws up to the principal limit.
21. The flexibility of the HECM program is demonstrated in which of the following answer choices:
A. Modified tenure, which is a combination of line of credit with ongoing monthly payments subject to principal limit.
B. Modified term, which is a combination of line of credit with monthly payments for a fixed period of months selected by the borrower.
C. The HECM program allows homeowners to restructure their payment options for a nominal fee if their circumstances change.
D. Any and all of the above.
A. Modified tenure, which is a combination of line of credit with ongoing monthly payments subject to principal limit.
B. Modified term, which is a combination of line of credit with monthly payments for a fixed period of months selected by the borrower.
C. The HECM program allows homeowners to restructure their payment options for a nominal fee if their circumstances change.
D. Any and all of the above.
answer
The correct answer is D. Yes, all of these answer choices demonstrate the flexibility of the HECM program.
22. All of the following are true of the loan origination fee for a HECM loan, except:
A. The loan origination fee is paid as a fee for services rendered to the lender for making the loan.
B. The loan origination fee is based on the selling price of the home.
C. If the value of the home is less than $125,000, the HECM loan origination fee is capped at $2,500.
D. If the value of the home is more than $125,000, the lender can charge 2% of the first $200,000 of value plus 1% of the amount over $200,000 up to a cap of $6,000.
A. The loan origination fee is paid as a fee for services rendered to the lender for making the loan.
B. The loan origination fee is based on the selling price of the home.
C. If the value of the home is less than $125,000, the HECM loan origination fee is capped at $2,500.
D. If the value of the home is more than $125,000, the lender can charge 2% of the first $200,000 of value plus 1% of the amount over $200,000 up to a cap of $6,000.
answer
The correct answer is B. The fee is based on the appraised value of the home. This is not a sales transaction.
23. A reverse mortgage is also known as which of the following:
A. Reverse equity mortgage.
B. Reverse annuity mortgage.
C. Home Equity Conversion Mortgage.
D. All of the above.
A. Reverse equity mortgage.
B. Reverse annuity mortgage.
C. Home Equity Conversion Mortgage.
D. All of the above.
answer
The correct answer is D. The HECM is an FHA insured loan and is the most popular reverse mortgage program.
24. HUD has implemented changes to the HECM loan program to protect the FHA Mutual Mortgage Insurance Fund (MMIF). These changes were necessitated by which of the following factors:
A. Shifting from a predominantly adjustable rate mortgage with borrowers electing to receive payments over time to a fixed rate mortgage where borrowers draw down all of the available funds at the time of closing.
B. Younger borrowers with higher amounts of property indebtedness.
C. Increasing property charge defaults.
D. All of the above.
A. Shifting from a predominantly adjustable rate mortgage with borrowers electing to receive payments over time to a fixed rate mortgage where borrowers draw down all of the available funds at the time of closing.
B. Younger borrowers with higher amounts of property indebtedness.
C. Increasing property charge defaults.
D. All of the above.
answer
The correct answer is D. These factors have bankrupted the MMIF.
25. FHA’s Fiscal Year 2012 report to Congress on the financial status of the MMIF projected the economic value of the HECM portfolio to be approximately which of the following:
A. $1 Billion.
B. $2 Billion.
C. Negative $1 Billion.
D. Negative $2.8 Billion.
A. $1 Billion.
B. $2 Billion.
C. Negative $1 Billion.
D. Negative $2.8 Billion.
answer
The correct answer is D. Although no monthly mortgage payments are due, this is because so many borrowers have defaulted on ongoing property charges such as property taxes, mortgage insurance, hazard insurance, and flood insurance.
26. What part of the Financial Assessment performed by a lender in a HECM loan might prevent the borrower from being granted the loan?
A. If the borrower is in default on any federal debts.
B. If the general credit standing of the borrower is not satisfactory to the Secretary of HUD.
C. If the borrower does not have enough fixed income to maintain ongoing property charges.
D. All of the above.
A. If the borrower is in default on any federal debts.
B. If the general credit standing of the borrower is not satisfactory to the Secretary of HUD.
C. If the borrower does not have enough fixed income to maintain ongoing property charges.
D. All of the above.
answer
The correct answer is D.
27. What measures could be taken to help a borrower obtain a HECM loan if the Financial Assessment came up lacking?
A. The mortgagee could mandate the use of some of the mortgage proceeds in settling debt.
B. The mortgagee could establish a life expectancy set-aside to fund property charge payments.
C. Regulation would prohibit the mortgagor from canceling a property charge set-aside.
D. All of the above.
A. The mortgagee could mandate the use of some of the mortgage proceeds in settling debt.
B. The mortgagee could establish a life expectancy set-aside to fund property charge payments.
C. Regulation would prohibit the mortgagor from canceling a property charge set-aside.
D. All of the above.
answer
The correct answer is D.
28. The Financial Assessment required by lenders when evaluating the risk for a HECM loan includes all of the following, except:
A. Credit history analysis.
B. Cash flow/residual income analysis.
C. Qualifying ratios.
D. Documenting and verifying credit.
A. Credit history analysis.
B. Cash flow/residual income analysis.
C. Qualifying ratios.
D. Documenting and verifying credit.
answer
The correct answer is C. No rigid qualifying ratios are considered.
29. The Financial Assessment required by lenders when evaluating the risk for a HECM loan includes which of the following:
A. Evaluate mortgagors’ willingness and capacity to meet their financial obligations.
B. Evaluate mortgagors’ ability to comply with mortgage requirements.
C. Determine whether the mortgagor meets FHA eligibility criteria.
D. All of the above.
A. Evaluate mortgagors’ willingness and capacity to meet their financial obligations.
B. Evaluate mortgagors’ ability to comply with mortgage requirements.
C. Determine whether the mortgagor meets FHA eligibility criteria.
D. All of the above.
answer
The correct answer is D. Borrowers who have met their credit obligations in the past in a cooperative and willing manner are deemed to be good prospects as mortgagors for a HECM loan.
30. Updated regulations to the HECM Reverse Mortgage Program deal with maximum disbursements at loan closing to include which of the following:
A. 60% of the principal limit.
B. The sum of the mandatory obligations, including closing costs, mortgage insurance, taxes, and hazard insurance, plus 10% of the principal limit to the borrower.
C. The borrower can receive a lump sum of 100% of the principal limit at closing.
D. A and B.
A. 60% of the principal limit.
B. The sum of the mandatory obligations, including closing costs, mortgage insurance, taxes, and hazard insurance, plus 10% of the principal limit to the borrower.
C. The borrower can receive a lump sum of 100% of the principal limit at closing.
D. A and B.
answer
The correct answer is D. Either of these options are available to the borrower.
31. For fixed interest rate HECMs with case numbers issued after June 25, 2014, HUD will insure only which of the following:
A. Monthly disbursements representing a payment not greater than 1% of property value.
B. A single lump sum disbursement with nominal future draws.
C. A single lump sum disbursement with no future draws by the mortgagor.
D. A credit line only.
A. Monthly disbursements representing a payment not greater than 1% of property value.
B. A single lump sum disbursement with nominal future draws.
C. A single lump sum disbursement with no future draws by the mortgagor.
D. A credit line only.
answer
The correct answer is C.
32. The nationwide maximum loan amount for a reverse mortgage is which of the following:
A. $500,000.
B. $625,500.
C. $750,000.
D. $1 million.
A. $500,000.
B. $625,500.
C. $750,000.
D. $1 million.
answer
The correct answer is B.
33. With the HECM loan, mortgage insurance is charged by HUD based on which of the following:
A. The greater of appraised value or the maximum loan limit that can be insured by FHA.
B. The maximum claim amount.
C. The minimum claim amount.
D. The borrower’s ability to pay.
A. The greater of appraised value or the maximum loan limit that can be insured by FHA.
B. The maximum claim amount.
C. The minimum claim amount.
D. The borrower’s ability to pay.
answer
The correct answer is B. The maximum claim amount is the lesser of the home’s appraised value or the maximum loan limit that can be insured by FHA.
34. The existing annual MIP rate for a HECM loan is which of the following:
A. .50%.
B. 1.0%.
C. 1.25%.
D. 2.50%.
A. .50%.
B. 1.0%.
C. 1.25%.
D. 2.50%.
answer
The correct answer is C. This applies to amounts of 60% or less of the principal limit as well as amounts greater than 60% of the principal limit.
35. Upfront mortgage insurance premium (UFMIP) for amounts of 60% or less of the principal limit is which of the following:
A. UFMIP is .50%.
B. UFMIP is 1.00%.
C. UFMIP is 1.25%.
D. UFMIP is 2.00%.
A. UFMIP is .50%.
B. UFMIP is 1.00%.
C. UFMIP is 1.25%.
D. UFMIP is 2.00%.
answer
The correct answer is A.
36. Upfront mortgage insurance premium (UFMIP) for amounts greater than 60% of the principal limit is which of the following:
A. UFMIP is .50%.
B. UFMIP is 1.00%.
C. UFMIP is 1.25%.
D. UFMIP is 2.50%.
A. UFMIP is .50%.
B. UFMIP is 1.00%.
C. UFMIP is 1.25%.
D. UFMIP is 2.50%.
answer
The correct answer is D.
37. Regarding HECM loans, effective with case numbers assigned on or after April 27, 2015, a Life Expectancy Set-Aside can be required by a mortgagee for which of the following property charges:
A. Taxes and special assessments.
B. Hazard insurance premiums.
C. Applicable flood insurance premiums.
D. All of the above.
A. Taxes and special assessments.
B. Hazard insurance premiums.
C. Applicable flood insurance premiums.
D. All of the above.
answer
The correct answer is D. Yes, all of these can be provided for by the mortgagee’s mandate of set-asides.
38. When performing the Financial Assessment of a borrower on the HECM loan, the mortgagee must take which of the following into consideration:
A. The prospective borrower is seeking the HECM loan out of financial need.
B. The financial difficulties suffered by the borrower may be reflected in the credit report.
C. The mortgagee must determine whether, given the mortgagor’s circumstances, the HECM will contribute to the solution of their financial difficulties.
D. All of the above.
A. The prospective borrower is seeking the HECM loan out of financial need.
B. The financial difficulties suffered by the borrower may be reflected in the credit report.
C. The mortgagee must determine whether, given the mortgagor’s circumstances, the HECM will contribute to the solution of their financial difficulties.
D. All of the above.
answer
The correct answer is D.
39. All of the following are required in the mortgagee’s Financial Assessment of a borrower for a HECM loan, except:
A. The HECM Financial Assessment must be conducted by a Direct Endorsement underwriter registered in FHA Connection by the mortgagee.
B. The HECM Financial Assessment must be conducted with the TOTAL Scorecard.
C. The HECM Financial Assessment must be performed in a non-discriminatory way.
D. Information on income, expenses, assets, and liabilities must be included in the original case binder.
A. The HECM Financial Assessment must be conducted by a Direct Endorsement underwriter registered in FHA Connection by the mortgagee.
B. The HECM Financial Assessment must be conducted with the TOTAL Scorecard.
C. The HECM Financial Assessment must be performed in a non-discriminatory way.
D. Information on income, expenses, assets, and liabilities must be included in the original case binder.
answer
The correct answer is B. TOTAL stands for Technology Open to Approved Lenders and is not permitted in a Financial Assessment for HECM loans. It is designed for forward loans only.
40. All of the following are true regarding a mortgagor applying for a HECM loan if they have a court-ordered judgment, except:
A. FHA requires the mortgagor to satisfy the judgment prior to closing on the loan.
B. The mortgagee may require the mortgagor to satisfy the judgment prior to closing on the loan.
C. FHA does not require the mortgagor to satisfy the judgment before closing on the loan.
D. Judgment liens must be removed or subordinated to the HECM loan.
A. FHA requires the mortgagor to satisfy the judgment prior to closing on the loan.
B. The mortgagee may require the mortgagor to satisfy the judgment prior to closing on the loan.
C. FHA does not require the mortgagor to satisfy the judgment before closing on the loan.
D. Judgment liens must be removed or subordinated to the HECM loan.
answer
The correct answer is A. Yes, surprisingly FHA does not require the mortgagor to satisfy the judgment lien prior to closing, but it must at least be subordinated so the HECM loan has priority.
41. If the mortgagee, during the Financial Assessment of a prospective borrower seeking to purchase a home with a HECM loan, discovers a Chapter 7 Bankruptcy, all of the following are true, except:
A. If two years have elapsed since the discharge date of the bankruptcy, the borrower may be able to get the HECM loan.
B. With a Chapter 7 Bankruptcy, even after two years, the borrower definitely will not be considered for the loan.
C. If during the two years since the discharge of the bankruptcy the borrower has been able to establish good credit, he/she may get the loan.
D. If during the two years since the discharge of the bankruptcy the borrower has chosen not to incur new credit obligations, he/she may get the loan.
A. If two years have elapsed since the discharge date of the bankruptcy, the borrower may be able to get the HECM loan.
B. With a Chapter 7 Bankruptcy, even after two years, the borrower definitely will not be considered for the loan.
C. If during the two years since the discharge of the bankruptcy the borrower has been able to establish good credit, he/she may get the loan.
D. If during the two years since the discharge of the bankruptcy the borrower has chosen not to incur new credit obligations, he/she may get the loan.
answer
The correct answer is B. Based on these conditions in the other answer choices, the borrower may be able to get the loan.
42. Effective with case numbers assigned on or after April 27, 2015, A Life Expectancy Set-Aside on a HECM loan can be reserved for which of the following charges:
A. Property taxes and special assessments.
B. Hazard insurance premiums.
C. Flood insurance premiums, if applicable.
D. All of the above.
A. Property taxes and special assessments.
B. Hazard insurance premiums.
C. Flood insurance premiums, if applicable.
D. All of the above.
answer
The correct answer is D. This, of course, to ensure that these property charges are paid in a timely manner.
43. Which of the following accurately describes the income requirement to qualify for a HECM loan:
A. The borrower must have a minimum of $25,000 in fixed income on an ongoing basis.
B. There is no income requirement for a reverse mortgage.
C. The borrower must have a minimum of $30,000 in fixed or variable income on an ongoing basis.
D. The income requirement is waived if the borrower has the ability to raise money in emergencies.
A. The borrower must have a minimum of $25,000 in fixed income on an ongoing basis.
B. There is no income requirement for a reverse mortgage.
C. The borrower must have a minimum of $30,000 in fixed or variable income on an ongoing basis.
D. The income requirement is waived if the borrower has the ability to raise money in emergencies.