Hecm Product
This is to test our knowledge of the HECM product.
- 1.A reverse mortgage allows an applicant:
- A.
To draw upon the equity in his/her home and they must repay it in monthly installments.
- B.
To draw upon the equity in his/her home without having to sell and without having to make any mortgage payments until the loan matures.
- C.
To draw upon the equity in his/her home to purchase investment or rental properties.
- 2.Applicants must be at least:
- A.
62 years of age.
- B.
50 years of age.
- C.
75 years of age.
- 3.The purpose of the HECM Product:
- A.
Release of equity from primary residence.
- B.
Refinance of existing reverse mortgage or equity release product.
- C.
Refinance of existing forward mortgage or home equity product.
- D.
All of the above.
- 4.The property must meet the following critiera:
- A.
No Minum home Value All applicants must occupy the home as their primary resident New or existing properites must be 100% complete
- B.
The minum home value is 85,000 Only 1 applicant must occupy the home as their primary residence New properties must be 100% completed at time of closing
- C.
No minimum home value Applicants may occupy their homes as a secondary residence New or existing properites must be 100% complete
- 5.Lien position must be in:
- A.
2nd lien position at the time of closing
- B.
1st lien position at the time of closing
- C.
None of the above
- 6.Principal Limit is:
- A.
The available credit line and represents the amount of money that can be drawn from the line of credit at any given time.
- B.
The withdrawn amount (which may include the payoff of property liens, any financed closing costs and the monthly servicing fee), plus accrued interest.
- C.
The total credit line and represents the amount of equity initially available to the applicant.
- D.
None of the above.
- 7.Maximum Claim is:
- A.
The lesser of the appraised value or the FHA National Lending Limit.
- B.
The maximum amount of equity an applicant can receive from the reverse mortgage.
- C.
None of the above
- 8.Gross Principal Limit is:
- A.
The maximum amount of equity an applicant can receive from the reverse mortgage.
- B.
The available credit line.
- C.
The amount of equity initially available to the applicant.
- 9.Net Principal Limit is the maximum amount of money available to an applicant after closing, calculated by determining the initial principal limit and subtracting the following:
- A.
Any initial payments on behalf of, or cash payments made to the applicant.
- B.
Any costs financed into the loan, such as closing costs, origination fee or upfront mortgage insurance premium (MIP).
- C.
Any cash payments made to the applicant.
- D.
All of the above.
- 10.Applicants must maintain adequate flood and hazard insurance.
- A.
True
- B.
False
- 11.Applicant must pay all property taxes or allocate funds from the reverse mortgage to maintain taxes in a current status.
- A.
True
- B.
False
- 12.Counseling is not required.
- A.
True
- B.
False
- 13.How many days does an applicant have to recide for all non-purchase funds?
- A.
Applicants have a three-business day right to rescind for all non-purchase funds.
- B.
Applicants have a five-business day right to rescind for all non-purchase funds.
- C.
Applicants does not have the right to rescind for all non-purchase funds.
- 14.Requirements for properity held in a life estate is:
- A.
The life tenant must be the applicant.
- B.
The life tenant and the remainder person(s) are required to sign the security instruments at closing
- C.
Only the life tenant (applicant) will sign all other loan documents
- D.
All of the above.
- 15.Applicant must pay all closing costs.
- A.
True
- B.
False
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