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HUD Certification | 90 Question & Answers
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HUD Certification | 90 Question & Answers
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HUD Certification | 90 Question & AnswersWhich document is most important when working with a client to develop an initial budget
as part of a Client Action Plan?
Pay stub
Retirement plan statement
List of assets
Current lease Correct Ans - Pay stub
A client would like purchase a home within one year. The client is motivated to increase household income as a way to save for a down payment and qualify for a loan. Which is the best solution for the client to reach this goal?
Find a second job
Borrow from retirement fund
Sell major assets
Find a temporary job through a staffing service Correct Ans - Find a second job
A credit report may contain which information?
The number of accounts in collection status
A history of payments on an electric bill
Income history
Criminal record Correct Ans - The number of accounts in collection status
A credit report contains inaccurate information. Which action item should the counselor include in the Client Action Plan?
-Attach a letter to mortgage applications explaining the inaccuracies.
-Investigate the reasons why the inaccuracies occurred to determine the responsible party.
-Include a personal consumer statement on the credit report.
-File a dispute with the appropriate credit reporting agency. Correct Ans - File a dispute with the appropriate credit reporting agency.
Six months ago a client left a job as a reporter to start a business in the retail industry. To prepare to buy a house, the client closed credit card accounts and has been using savings to
pay down credit card debt and collections. The client has not been able to save much for a down payment with all the debt payments but knows about an affordable home-ownership program that only requires a 1% down payment with an FHA loan.
What might result from the client closing the credit card accounts?
-It decreases credit utilization, causing a negative impact on the credit score. -It increases credit utilization, causing a negative impact on the credit score.
-It increases credit utilization, causing a positive impact on the credit score.
-It decreases credit utilization, causing a positive impact on the credit score. Correct Ans - It decreases credit utilization, causing a positive impact on the credit score.
Which action would a client take to improve a credit score?
-Request to expunge public records
-Apply for new credit cards to increase credit
-Cancel all credit cards
-Pay delinquent accounts Correct Ans - Pay delinquent accounts
A client does not receive a written monthly statement from the credit card company. Which
credit law could this omission violate?
-Fair Credit Billing Act
-Fair Credit Reporting Act
-Fair Housing Act
-Fair and Accurate Credit Transactions Act Correct Ans - Fair Credit Billing Act
A client shopping for a mortgage loan presents a housing counselor with an offer from a local mortgage lender. The interest rate on the offer is 7.5% for a 30-year fixed rate mortgage with a 20% down payment required. The counselor reviews the client file and determines the client's credit score is 725 and the client's total debt-to-income ratio is 20%.
The client asks the housing counselor if the offer is a case of illegal predatory lending. How should the housing counselor respond?
-"You have been a victim of predatory lending and should file a report with the Consumer Finance Protection Bureau (CFPB)."
-"The loan seems reasonable. You might do better, but I cannot steer you to any particular loan originator."
-"I am unable to determine whether the loan is predatory, but I suggest you shop around with other lending sources."
-"I cannot offer legal advice, but I would not proceed with the loan." Correct Ans - "I am unable to determine whether the loan is predatory, but I suggest you shop around with other lending sources."
Which action should a counselor recommend a client take first after discovering identity theft?
-File for a name change.
-Apply for a new Social Security number.
-File an identity theft report.
-Purchase identity theft protection. Correct Ans - File an identity theft report. In which situation would a client's responsibilities, recurring costs, and upfront costs be evaluated?
-When considering closing costs
-When choosing a loan officer
-When weighing housing options
-When applying for a loan modification Correct Ans - When weighing housing options
A client works 40 hours a week making $15 an hour. What is the highest monthly mortgage
the client can afford based on income if the client secures a conventional loan?
-$728
-$806
-$936
-$1,118 Correct Ans - $728
Which type of government insured loan was created for financing homes in rural areas?
-VA
-Fannie Mae
-FHA
-USDA Correct Ans - USDA
Which type of assistance administered by a public housing authority allows for location flexibility. A client keeps having budget problems due to unexpected expenses. Which financial tool would best assist this client to prepare for unexpected expenses and avoid increasing credit usage?
-Emergency fund
-Line of credit
-Payday loan
-Retirement savings account Correct Ans - Emergency fund
A client has a monthly household income of $2,300, monthly debt payments of $450, and an
optimal monthly housing ratio of 32%. What is the client's optimal monthly housing payment?
-$592
-$736
-$880
-$1,186 Correct Ans - $736
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