The supervisor compares the file facts with Reverse Mortgage Payment Options during a borrower follow-up call. Which conclusion is accurate?
Correct Answer
B) Check whether special high-cost or rescission rules apply
Why this is correct: The correct answer is "Check whether special high-cost or rescission rules apply." Reverse mortgages are a specialty product with unique features and risks. They are subject to specific consumer protection rules, including special disclosure requirements, counseling mandates, and potentially high-cost mortgage (HOEPA) rules if certain cost thresholds are triggered. The right of rescission rules also apply differently to these loans compared to standard forward mortgages. A supervisor must verify the file complies with these product-specific regulations. Why the other choices are wrong: "Apply a different loan-program rule without checking the file facts" is wrong because it promotes applying rules blindly without verifying their applicability to the specific loan facts, which is a compliance error. "Ignore product, occupancy, LTV, or eligibility limits because the borrower prefers the loan" is wrong because borrower preference never overrides legal and program eligibility requirements. "Use the same treatment for all mortgage products without comparing program requirements" is wrong because reverse mortgages have distinct rules that differ significantly from those for standard purchase or refinance mortgages. Exam tip: Specialty loans (reverse, HELOC, interest-only) always require you to double-check for unique rules on disclosures, counseling, and high-cost 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 C: 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: Use the same treatment for all mortgage products without comparing program requirements.
Use the same treatment for all mortgage products without comparing program requirements. is not correct because it does not apply the rule tested by this file scenario.
Memory Technique
Reverse Mortgage Payment Options: 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 Payment Options; 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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