A risk reviewer compares the file facts with Reverse Mortgage Features during a borrower follow-up call. Which conclusion is accurate?
Correct Answer
C) Check whether special high-cost or rescission rules apply
Why this is correct: Reverse mortgages are a specialty product subject to distinct federal rules, including special counseling requirements, right of rescission, and, if applicable, high-cost loan (HOEPA) provisions. A proper review must check for these product-specific rules. Why the other choices are wrong: - "Apply a different loan-program rule without checking the file facts" is wrong because rules must be applied based on the actual product features in the file, not arbitrarily. - "Ignore product, occupancy, LTV, or eligibility limits because the borrower prefers the loan" is wrong because reverse mortgage eligibility and feature rules (like age, occupancy) are mandatory and cannot be ignored. - "Treat the Reverse Mortgage Features review as complete because the file contains a related closing disclosure note" is wrong because the presence of a note does not confirm that all required specialty product rules (e.g., counseling, rescission) have been satisfied. Exam tip: For specialty loans like reverse mortgages, always remember the unique safeguards: mandatory counseling, right of rescission, and potential high-cost loan triggers.
Why This Is the Correct Answer
The correct response is "Check whether special high-cost or rescission rules apply" because Specialty products such as HELOCs, reverse mortgages, nontraditional loans, and high-cost loans require product-specific rules.
Why the Other Options Are Wrong
Option A: Apply a different loan-program rule without checking the file facts.
Apply a different loan-program rule without checking the file facts. is not correct because it does not apply the rule tested by this file scenario.
Option B: Ignore product, occupancy, LTV, or eligibility limits because the borrower prefers the loan.
Ignore product, occupancy, LTV, or eligibility limits because the borrower prefers the loan. is not correct because it does not apply the rule tested by this file scenario.
Option D: Treat the Reverse Mortgage Features review as complete because the file contains a related closing disclosure note.
This distractor shifts the issue to a different trigger, product, or timing rule instead of applying the rule tested in the stem.
Memory Technique
Reverse Mortgage Features: identify the rule being tested, then choose the action that documents or applies that rule before the file moves forward.
Exam Tip
Match the file facts to Reverse Mortgage Features; do not choose an exception or shortcut that skips the required rule.
Common Mistakes to Avoid
- -Choosing an internal exception instead of the governing rule
- -Treating preliminary or informal facts as a substitute for required documentation
- -Answering from a familiar but unrelated mortgage topic
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