Exam (elaborations)
HECM FINAL EXAM 150 QUESTIONS WITH 100% CORRECT VERIFIED SOLUTIONS /A+ GRADE ASSURED
- Course
- Institution
- Book
HECM FINAL EXAM 150 QUESTIONS WITH 100% CORRECT VERIFIED SOLUTIONS /A+ GRADE ASSURED
[Show more]
Connected book
Book Title:
Author(s):
- Edition:
- ISBN:
- Edition:
Seller
Follow
charitywairimuuu
Content preview
HECM FINAL EXAM 150 QUESTIONS WITH 100%CORRECT VERIFIED SOLUTIONS /A+ GRADE ASSURED
A reverse mortgage is... - ANSWER: a loan against the value of a home that provides
cash advances to a borrower, requiring no repayment until a future time.
A reverse mortgage is different from a home equity loan because - ANSWER: You do
not have to make monthly repayments on a reverse mortgage
A reverse mortgage must be repaid - ANSWER: When the last eligible borrower dies,
sells, or permanently moves away
The purpose of a reverse mortgage is most often - ANSWER: To generate cash
Reverse mortgages are typically loans with _______debt and _________ equity -
ANSWER: Rising debt and falling equity
What happens when a reverse mortgage becomes due and payable? - ANSWER: The
borrower or their heirs repay the loan if able
The "non-recourse" limit on a reverse mortgage means... - ANSWER: The borrower
cannot be required to repay more than the value of the home. This is where
mortgage insurance comes in. Also, the borrower's estate and heirs are protected
against deficiency judgments.
What is the purpose of reverse mortgage insurance? - ANSWER: It protects the
lenders against loan losses, protects the borrowers with a non-recourse limit, and
lets the borrowers remain in their homes as long as they choose.
The risk of loan losses in reverse mortgage lending is controlled by... - ANSWER:
controlling the amount of loan advances and charging a premium on all loans to
create a reserve fund.
When a HECM loan is repaid, the borrower must pay back... - ANSWER: The funds
received plus loan fees and interest compounded on the entire balance.
What happens when an adjustable interest rate on a reverse mortgage goes up? -
ANSWER: The loan balance grows faster, as well as as the creditline.
What are the 3 eligibility requirements for HECM borrowers? - ANSWER: 1. Age 62+
2. Owns the home
3. Live in the home as principal residence (~6 months out of the year)
If a property is held as a life estate, who has to agree in order to allow a HECM to be
approved? - ANSWER: Owners of "remainder interest" or the one living in the house
, When a property is placed in a trust, the three "roles" are the... - ANSWER: Grantor,
beneficiaries, and trustee
If a property is owned by a trust, who has to be at least 62 years old in order for the
property to be HECM-eligible? - ANSWER: Current beneficiaries
T/F: A HECM loan is a loan against the equity in a home - ANSWER: False; a HECM is a
long against the entire value of the house
What 3 factors determine the loan amount for a HECM? - ANSWER: 1. Age
2. Expected Rate
3. Maximum Claim Amount (MCA)
The Maximum Claim Amount (MCA) on a HECM is defined as - ANSWER: the lesser of
the home value and HUD lending limit
The Principal Limit Factor is similar to the _______ in a forward mortgage. -
ANSWER: Loan-to-Value (LTV)
Would a 62 year old borrower receive less or more than someone who is 82? -
ANSWER: Less
What fee starts out at $2500 and cannot exceed $6000? - ANSWER: Mortgage
Origination Fee
What is the upfront mortgage insurance premium on a HECM loan? - ANSWER: 2% of
the MCA
What are the three upfront costs that may be charged on a HECM loan? - ANSWER:
1. Origination Fee
2. Upfront MIP
3. Third-Party Costs
What is the term for the money that is reserved from the principal limit for a future
purpose? - ANSWER: Set-Aside
T/F: If the borrower keeps the HECM for only a year, the remaining LESA will be
refunded. - ANSWER: False
If required repairs are less than ________% of the _______________ they may be
completed after closing, if the lender agrees. - ANSWER: 15%; MCA
How long do tenure payments last? - ANSWER: As long as at least one eligible
borrower lives in the home
T/F: Changes in the interest rate after closing will affect the amount of monthly term
payments. - ANSWER: False
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller charitywairimuuu. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $17.99. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
83100 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now