What counseling requirement must be completed before a borrower can obtain a reverse mortgage?
Correct Answer
B) HUD-approved reverse mortgage counseling
HUD requires that all reverse mortgage borrowers complete counseling with a HUD-approved housing counseling agency before obtaining a reverse mortgage. This counseling must cover the loan terms, costs, alternatives to reverse mortgages, and the borrower's obligations. A certificate of completion is required before the loan can proceed.
Why This Is the Correct Answer
HUD requires that all reverse mortgage borrowers complete counseling with a HUD-approved housing counseling agency before obtaining a reverse mortgage. This counseling must cover the loan terms, costs, alternatives to reverse mortgages, and the borrower's obligations. A certificate of completion is required before the loan can proceed.
More Mortgage Knowledge Questions
A borrower is comparing two loan offers: Loan A has no points and 4.5% interest rate, Loan B has 2 points and 4.0% interest rate. The loan amount is $400,000. How much will the borrower pay upfront for the points on Loan B?
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A borrower asks about the difference between discount points and origination fees. What is the most accurate explanation?
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