HECM EXAM AND PRACTICE EXAM 2023-2024
ACTUAL EXAM 250 QUESTIONS AND CORRECT
DETAILED ANSWERS (100% VERIFIED ANSWERS)
|AGRADE||BRAND NEW!!
HECM ACTUAL EXAM
All of the following property types are eligible to receive HECM loans provided
they meet the necessary HUD requirements EXCEPT:
A. Manufactured Homes
B. Condominium Units
C. Properties located in PUDs
D. Cooperative Housing Units
E. All are eligible property types – ANSWER- D
T/F All borrowers are expected to maintain Hazard (Homeowners) Insurance and
Flood Insurance under HECM guidelines. – ANSWER- False
How long does a borrower have to complete required repairs after closing?
A. 3 months
B. 6 months
C. 9 months
D. 12 months
E. Time period specified in the loan agreement – ANSWER- E
T/F Required repairs that are estimated to cost less than 15% of the maximum
claim amount must be completed before closing. – ANSWER- False
The repair administration fee is paid to_____.
A. The lender
B. The borrower after repairs are completed
C. The HUD inspector
D. The appraiser – ANSWER- A
The lending limit is $625,500, and a borrower has a principal limit of $420,000 and
appraised value is $700,000. What is the max claim amount?
A. $625,500
B. $420,000
C. $700,000
D. Not enough information has been provided to answer the question – ANSWERB
T/F Unlike a traditional mortgage, the closing costs of a HECM are taken out of
the loan proceeds. – ANSWER- True
T/F The borrower does not pay any interest on any of the closing costs that were
taken out of the loan proceeds. – ANSWER- False
A borrower has a $200,000 home value. What is the likely upfront cost added to
the loan balance at closing? (Revisit. Where is the formula?)
A. $7,000
B. $10,000
C. $15,000
D. $20,000 – ANSWER- B
Monthly adjustable rates can’t adjust by more than___.
A. Two percentage points per year
B.Five percentage points per year
C. Two percentage points over the life of the loan
D. Ten percentage points over the life of the loan – ANSWER- D
Borrowers with delinquent federal debt are not eligible for a HECM___.
A. Ever
B. Until the debt is satisfied
C. For 2 years after the debt is satisfied
D. For 7 years after the debt is satisfied – ANSWER- B
A lender must screen all borrowers on which of the following:
A. LDP
B. GSA
C. CAIVRS
D. All of the above – ANSWER- D
A borrower must be what age before signing a loan application in order to receive
a HECM?
A. 60
B. 61
C. 62
D. 63 – ANSWER- B
T/F Only one HECM borrower must be living in the home in order for the HECM
loan to close. – ANSWER- True
When is a borrower able to close in the name of a Living Trust for a HECM?
A. When all the beneficiaries of the trust are eligible HECM borrowers
B. When all the trustees of the trust are eligible HECM borrowers
C. Both a and b above
D. Can’t be done – ANSWER- A
T/F A Durable Power of Attorney is not permitted on HECM loans; only a court
appointed Guardianship. – ANSWER- False
A borrower’s appraised value is $750,000. What is the required title insurance
amount?
A. $750,000
B. $525,000
C. $625,500
D. Not enough information to answer the question – ANSWER- A
T/F Generally, unsecured debts other than delinquent Federal debts (i.e. credit card
debt), regardless of their status should not impact negatively on the borrower’s
eligibility. – ANSWER- True
T/F The counseling certificate is generated by each counseling agency on their
own letterhead. – ANSWER- False
What is a mortgagee letter?