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2024 Newest| HECM Exam| UPDATE|COMPREHENSIVE FREQUENTLY MOST TESTED QUESTIONS AND VERIFIED ANSWERS|GET IT 100% ACCURATE
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2024 Newest| HECM Exam| UPDATE|COMPREHENSIVE FREQUENTLY MOST TESTED QUESTIONS AND VERIFIED ANSWERS|GET IT 100% ACCURATE 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...

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  • November 11, 2024
  • 25
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • 2024 newest hecm exam updatecomprehens

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2024 Newest| HECM Exam|2024-2025 UPDATE|COMPREHENSIVE
FREQUENTLY MOST TESTED QUESTIONS AND VERIFIED
ANSWERS|GET IT 100% ACCURATE



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.

Copyright ©EMILYCHARLENE2025. ALL RIGHTS RESERVED
Page 1/25

,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



Copyright ©EMILYCHARLENE2025. ALL RIGHTS RESERVED
Page 2/25

, 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




Copyright ©EMILYCHARLENE2025. ALL RIGHTS RESERVED
Page 3/25

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