Hecm Product

15 Questions | Total Attempts: 202

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Product Management Quizzes & Trivia

This is to test our knowledge of the HECM product.


Questions and Answers
  • 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      The withdrawn amount (which may include the payoff of property liens, any financed closing costs and the monthly servicing fee), plus accrued interest.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