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HECM Test 5: Questions W/Complete Solutions
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HECM Test 5: Questions W/Complete Solutions
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HECM Test 5: Questions W/Complete SolutionsThe objective of reverse mortgage counseling is to educate clients on
Correct Ans - how reverse mortgages work and their implications
· the appropriateness of a reverse mortgage for their personal and financial
situations, and
· possible financial alternatives to reverse mortgages
The following topics must be thoroughly covered in every reverse mortgage
counseling session Correct Ans - client needs and circumstances
· features of a reverse mortgage
· client responsibilities under a reverse mortgage
· costs to obtain a reverse mortgage
· financial/tax implications of a reverse mortgage
· financial or social service alternatives to a reverse mortgage, and
· warnings about potential reverse mortgage/insurance fraud schemes and
elder abuse.
Once the counseling session is complete, the counselor should complete the
client file, either
paper or electronic is acceptable. As stated in HUD's Housing Counseling
Handbook, all
counseling agencies must maintain a separate, confidential file for each client.
The counselor
must ensure that the file contains all of the following conten Correct Ans -
File number: A file number for the unique counseling interaction;
□ Financial Analysis/Budget: Evidence of analysis of the client's unique
financial and credit
circumstances as they relate to the reverse mortgage;
□ Required Data: All required fields listed in the Interface Control Document
(ICD) of the
Client Management System - details regarding these fields can be found at:
http://www.hud.gov/counselors/.
□ Activity Log: A record of the date, time, duration, and description of each
interaction or
activity performed with, on behalf of, and by, the client;
, □ Follow up: A record of all follow-up communication with the client must be
documented.
This documentation must also include an account of all attempts to contact
clients to conduct
follow-up sessions;
□ Counseling Participants: Listing of people other than the borrower(s) that
attended the
reverse mortgage counseling session and a description of their relationship to
the client(s);
□ Counseling Certificate: Signed and dated HECM counseling certificate; if the
certificate
was not issued, the reason why it was withheld;
Agency Disclosure Statement: A copy of the disclosure statement provided to
each client in
a face-to-face setting or a notation of the date that the disclosure statement
was verbally or
electronically provided during telephone counseling. The disclosure
statement identifies the
agency and explicitly describes the various types of services that it provides. It
must clearly
state that the client is not obligated to receive, purchase, or use any other
services offered by
the organization or its exclusive partners, in order to receive counseling
services. For clients
receiving telephone counseling, the agency must verbally or electronically
provide a
disclosure that meets these requirements.
□ Power of Attorney or other documents relating to legal competency, if
applicable;
□ Total Annual Loan Cost (TALC): Assessment of the total annual costs of a
reverse
mortgage including interest payments and other fees that require payment;
□ Amortization schedules for reverse mortgage loan options
Notation of other brochures or handouts on the reverse mortgage lending
process /
procedures / timelines, reverse mortgage lenders, and/or alternatives to a
reverse mortgage
provided to the client;
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