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HECM TEST 5 QUESTIONS AND ANSWERS
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HECM TEST 5 QUESTIONS AND ANSWERS
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HECM TEST 5 QUESTIONS AND ANSWERSThe objective of reverse mortgage counseling is to educate clients on - Answers-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 - Answers-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 - Answers-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 compe
When the counselor performs emergency counseling and the client receives
the information packet during or after the counseling session, counselors
should - Answers-wait 24 to 48 hours to contact the client so that the client has time to
review
the materials and consider his/her options, and
· emphasize that the client may call the counselor at any time with additional
questions or concerns.
The counselor must record on the certificate - Answers-The name of the counselor;
The name of the counseling agency;
The employer HCS (Housing Counseling System) ID of the counseling entity;
The date and signature of both the counselor and all prospective borrowers;
The date that that the client completed counseling;
The expiration date for the certificate provided by the counselor;
The type of counseling performed (face-to-face or telephone);
The duration of the counseling session(s); and
If applicable, the signature of the client's legal representative
talc general overview - Answers-Although the counselor can provide a general overview
of reverse mortgage costs to a client, only a lender can provide the client with the actual
costs of a specific product. Only the client can weigh the costs and benefits of a reverse
mortgage for himself or herself to determine whether or not the loan would meets his or
her needs and circumstances
talc rates loan cost - Answers-The TALC rate is the annual average rate that includes all
loan costs and takes into account the future loan balance including all loan advances.
The TALC is what the interest rate would be if all loan costs had to be included in the
interest rate
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