HUD Exam - Avoiding Foreclosure

A counselor needs to know the following items in order to evaluate a client's budget, except: A. Credit score reflecting recent negative impact B. Monthly income from a part-time job C. Credit report information including delinquencies. D. Mortgage information including past due amount.

A. Credit score reflecting recent negative impact. -While credit scores are important for overall financial understanding, the score is not necessary to create a budget.

A process that allows a homeowner to avoid foreclosure, providing a deed to the lender instead. Though it helps avoid foreclosure, the process does not allow the homeowner to stay in the home. A. Deed-in-Lieu B. Foreclosure C. Short Sale D. None of the above

A. Deed in-Lieu -Though it helps avoid foreclosure, the process does no allow the homeowner to stay in the home.

A Florida homeowner is five months behind on her mortgage and has received an NOD. She had a temporary financial hardship that is now cleared. She can make up the past due amount overtime. She has requested assistance from her servicer but has been declined. What financial assistance program would be her best options? A. Leon County Foreclosure Prevention Assistance Program B. Florida Hardest-Hit - Mortgage Loan Reinstatement Payment C. Florida Hardest-Hit - Unemployment Mortgage Assistance Program

A. Leon County Foreclosure Prevention Assistance Program.

A non-judicial foreclosure is done through the use of __________. A. Public notices and advertisements B. A court procedure C. A trustee D. All of the above

A. Public notices and advertisements

All of the following statements are true if a client would like to secure rental housing after a foreclosure, short sale, or deed-in-lieu, except: A. The client should wait until after the sale is finalized. B. The client should be prepared to have a co-signer. C. The client should try to secure housing before the sale is finalized. D. The client should have money saved for a security deposit.

A. The client should wait until after the sale is finalized -Because the client's credit score will be negatively impacted, s/he should try to secure housing prior to the finalization of the sale.

Issuance of New Morgage Rules was created in order: A. To make it easier for borrowers to understand loan terms, to require homeownership counseling for some mortgages, and to expand protections. B. To enable 18 states and the District of Columbia to develop locally tailored programs to assist struggling homeowners in their communities. C. To create a federal agency charged with addressing failures of consumer protection. D. To penalize five financial institutions for deceptive lending and foreclosure practices

A. To make it easier for borrowers to understand loan terms, to require homeownership counseling for some mortgages, and to expand protections.

A Borrower receives a call from a lending company that says they will get her a modification for $1,000. Is this an aspect of a loan modification scam? A. Yes. B. No.

A. Yes

Borrower receives a call from a company she's never heard of about a loan modification and is asked for her Social Security number over the phone. Is this an aspect of a loan modification scam? A. Yes B. No

A. Yes

Under the MHA program, modification options offer relief to homeowners__________, while refinance options target borrowers ___________. A. in default; in good standing B. in good standing; in default C. with GSE loans; with non-GSE loans D. with non-GSE loans, with GSE loans

A. in default/in good standing

Lenders often offer short sale of deed-in-lieu options for homeowners trying to sell the home quickly before attempting a regular home sale. A. True B. False

B. False -The term "short sale" refers to a shortage in the amount repaid, not the length of the sale period. A regular home sale is often the best option for both homeowner and lender, though underwater mortgages and other circumstances may require the evaluation of alternative options, such as a short sale or deed-in-lieu.

A Florida homeowner is three months behind on her mortgage because she was laid off and has received an NOD. She is working full-time again and can afford her original payments once she is caught up. Which financial assistance program would best fit her situation? A. Leon County Foreclosure Prevention Assistance Program B. Florida Hardest-Hit - Mortgage Loan Reinstatement Payment C. Florida Hardest-Hit - Unemployment Mortgage Assistance Program

B. Florida Hardest-Hit Program - Mortgage Loan Reinstatement Payment

A legal process in which mortgaged property is sold to pay the loan of the defaulting borrower. Laws are based on the statutes of each state. A. Deed-in-Lieu B. Foreclosure C. Short Sale D. None of the above

B. Foreclosure

Which program continued to be available to borrowers after the MHA expiration in December 2016? A. HAMP B. HARP C. PRA

B. HARP -The HARP expiration date was September 30, 2017

The deficiency judgment: A. Only occurs with an ARM loan. B. Is the amount of the lender's loss. C. Always occurs with a short sale D. only occurs when there is forgiven debt.

B. Is the amount of the lender's loss

Jessica, a Florida resident, was in a car accident and subsequently had to pay medical bills and purchase a new car. Although she is still able to work, Jessica is unable to cover her mortgage payment because of the unexpected expenses. She is now seven months past due on her mortgage and has received a Notice of Default. Her requests to her servicer for a retention option have been denied. To help her catch up on her other bills so she can start making her mortgage payments again, for which payment assistance program should she apply? A. Florida Hardest-Hit Program B. Leon County Foreclosure Prevention Assistance Program C. Florida Hardest-Hit Program - Unemployment Mortgage Assistance Program

B. Leon County Foreclosure Prevention Assistance Program. -Jessica has exhausted all other options and will not qualify for the other programs since she was never unemployed.

All of these are options when creating an emergency budget for a client who wants to remain in his/her home, except: A. Asking older children who live with them to help pay some bills. B. missing mortgage payments C. Cooking dinner at home every night D. Earning extra income from a side business.

B. Missing mortgage payments. Homeowners need to show their servicer they are making a good faith effort to meet financial obligations.

A Borrower receives a letter from his servicer discussing possible workout options. Is this an aspect of a loan modification scam? A. Yes. B. No.

B. No

Borrower receives letter from HARP program informing him he may qualify for refinancing. Is this an aspect of a loan modification scam? A. Yes B. No

B. No

Is the servicer required to give information about specific loss mitigation options? A. Yes B. No

B. No

Since receiving a loan modification several years ago, a borrower had been current on his mortgage until he recently suffered a severe reduction in income. A housing counselor advised the client to seek assistance from the servicer to prevent foreclosure. The servicer claimed it could not evaluate the borrower for further relief due to the prior modification. Is the servicer in compliance? A. Yes B. No

B. No. -Servicers are required to provide certain borrowers with foreclosure protections more than once over the life of the loan, provided that borrowers become current on payments at any time between completed prior and subsequent loss mitigation applications.

When a borrower is trying to avoid foreclosure, a mortgage company will usually consider a _____ before a _____. A. deed-in-lieu, short sale B. short sale, deed-in-lieu

B. Short sale, deed-in-lieu

Which actions below typically occur during a judicial foreclosure process? A. The client receives a Notice of Default in the mail. B. The client's opportunity to fight a foreclosure takes place in court. C. Communication occurs between the servicer and the homeowner D. Both A and B

B. The client's opportunity to fight a foreclosure takes place in court.

The Hardest-Hit Fund was created in order: A. To make it easier for borrowers to understand loan terms, to require homeownership counseling for some mortgages, and to expand protections. B. To enable 18 states and the District of Columbia to develop locally tailored programs to assist struggling homeowners in their communities. C. To create a federal agency charged with addressing failures of consumer protection. D. To help homeowners avoid foreclosure, stabilize the housing market, and improve the economy.

B. To enable 18 states and the District of Columbia to develop locally tailored programs to assist struggling homeowners in their communities.

Making Home Affordable was created in order: A. To make it easier for borrowers to understand loan terms, to require homeownership counseling for some mortgages, and to expand protection B. To help homeowners avoid foreclosure, stabilize the housing market, and improve the economy. C. To enable 18 states and the District of Columbia to develop locally tailored programs to assist struggling homeowners in their communities. D. To penalize five financial institutions for deceptive lending and foreclosure practices

B. To help homeowners avoid foreclosure, stabilize the housing market, and improve the economy.

What does it mean for a mortgage to be underwater? A. A mortgage required for any structure built at or below sea level. B a home suffered flooding and resulting damages caused mortgage delinquency. C. A mortgaged property is worth less than the balance owed to the lender. D. A borrower is drowning in late payments and trying to become current.

C. A mortgaged property is worth less than the balance owed to the lender.

All of the following are eligibility requirements of the FHA-HAMP Loan Modification, except: A. Mortgage is in default of imminent default but not in foreclosure. B. At least one borrower has continuous income. C. Borrower must demonstrate minimum surplus income amount. D. Property must be and must remain the borrower's primary residence.

C. Borrower must demonstrate minimum surplus income amount. -Borrower must demonstrate that income is insufficient to cure arrears within six months.

Loss Mitigation options to avoid foreclosure include: A. Only options for retention of the home B. Only options to transition from the home C. Both options for retention of the home or transition from the home. D. Evacuating the home as soon as possible.

C. Both options for retention of the hoe or transition from the home.

A Florida homeowner had his hours cut in half and is struggling to pay his mortgage. He has made partial payments for six months, but the servicer has sent him a NOD. Which financial assistance program would best fit this client's situation? A. Leon County Foreclosure Prevention Assistance Program B. Florida Hardest-Hit - Mortgage Loan Reinstatement Payment C. Florida Hardest-Hit - Unemployment Mortgage Assistance Program

C. Florida Hardest-Hit - Unemployment Mortgage Assistance Program

A Florida homeowner has been unemployed for 14 months and is now facing foreclosure. Which financial assistance program may s/he qualify for? A. Leon County Foreclosure Prevention Assistance Program B. Florida Hardest-Hit - Mortgage Loan Reinstatement Payment C. Florida Hardest-Hit - Unemployment Mortgage Assistance Program

C. Florida Hardest-Hit Program - Unemployment Mortgage Assistance Program.

Suspending or reducing normal monthly payments for a fixed period of time and paying the arrears in a lump sum or by a long-term payment plan is called: A. Temporary indulgence B. Reinstatement C. Forbearance D. Deferment

C. Forbearance

A procedure in which the borrower is allowed to sell a property for an amount less than the outstanding mortgage balance owed to avoid a foreclosure. Also called a preforeclosure sale. A. Deed-in-Lieu B. Foreclosure C. Short Sale D. None of the above

C. Short Sale

The Consumer Finance Protection Bureau was created: A. To penalize five financial institutions for deceptive lending and foreclosure practices. B. To make it easier for borrowers to understand loan terms, to require homeownership counseling for some mortgages, and to expand protections C. To create a federal agency charged with addressing failures of consumer protection D. To help homeowners avoid foreclosure, stabilize the housing market, and improve the economy

C. To create a federal agency charged with addressing failures of consumer protections

Judicial Foreclosure is defined as a foreclosure action or actions ______________. A. without court proceedings B. used to expedite process C. taken in a court proceeding D. accomplished by the use of letters and public notice.

C. taken in a court proceeding

What are the most common reasons why individuals face foreclosure? Select one of the following options. A. Increase in expenses and reduction in income. B. Medical bills and poor budget management skills C. Poor investment and/or not being able to flip an investment property D. Reduced and/or lost income.

D Reduced and/or lost income

How many days from the date of the missed payment does the servicer have to make live contact with the homeowner? A. 42 B. 60 C. 90 D. 36

D. 36

Anthony received a letter regarding modifying his mortgage in the mail, and he knew it was from a scammer. To which of the following entities should he report this activity? A. Federal Trade Commission B. Homeowners Hope Hotline C. Loan Modifications Scam Alert Campaign D. All of the above

D. All of the above -Scams should be reported to each of these entities to ensure documentation is thorough

Which actions belowe typically occur during a non-judicial foreclosure process? A. The client receives a Notice of Default in the mail. B. The servicer can't take any foreclosure action against a client until a judge grants them permission. C. The client has until five days before a foreclosure sale to cure a delinquency and stop the sale. D. Both A and C.

D. Both A and C.

The following contributed to the increase in foreclosure rates, except: A. Subprime lending B. Risky loan products with feature like negative amortization C. Demand from the secondary market D. Homeowners paying off mortgages early E. Using teaser rates to qualify more borrowers.

D. Homeowners paying off mortgages early.

A client needs to gather all of the financial documentation below to submit an MHA loan modification request, except: A. Two most recent bank statements B. Utility bill showing homeowner name and property address C. Last two years tax returns D. Information on amounts paid for child care

D. Information on amounts paid for child care -This is not a required piece of financial information.

All are consequences of a homeowner going through foreclosure, short sale, or deed-in-lieu, except: A. Negative impact on credit for several years. B. Short-term inabtility to secure a new prime mortgage. C. Potential loss of equity built up in home. D. Lack of financial assistance for relocation.

D. Lack of financial assistance for relocation. -Relocation assistance can be offered for homeowners considering all three options.

Which of the following is not a loss mitigation tool that would be used with an incurable situation? A. Deed-in-Lieu of Foreclosure B. Short Sale C. Hardship Assumption D. Modification

D. Modification

If a servicer agrees to accept more than a payment a month until the loan is brought current, it is called: A. Deed in Lieu of Foreclosure B. Reinstatement C. Forebearance D. Repayment Agreement

D. Repayment Agreement

All of the following are true about HLP's Case Status system, except: A. The Status tab is only visible when a case is open B. It shows the last case update and amount of time the case remained in the previous status. C. It shows who is in control of the process - the servicer or the counselor. D. Servicers must update the case status every 20 days when they are in control of the process.

D. Servicers must update the case status every 20 days when they are in control of the process. -Servicers must update the case status every 10 days.

Which best describes access to the HLP main platform where loss mitigation/retention option applications are submitted? A. Counselors can sign up for an account directly on the site B. Homeowners can sign up for an account directly on the site. C. Only counselors with certain certifications can have an account on the site. D. The counseling agency's HLP account administrator must provide access for each counselor at the agency.

D. The counseling agency's HLP account administrator must provide access for each counselor at the agency. -One person from each agency serves as its administrator and creates accounts for each counselor that should access the site.

The National Mortgage Settlement was created: A. To make it easier for borrowers to understand loan terms, to require homeownership counseling for some mortgages, and to expand protections B. To enable 18 states and the District of Columbia to develop locally tailored programs to assist struggling homeowners in their communities C. To help homeowners avoid foreclosure, stabilize the housing market, and improve the economy D. To penalize five financial institutions for deceptive lending and foreclosure practices.

D. To penalize five financial institutions for deceptive lending and foreclosure practices

A counselor must know the foreclosure processes. The following state agencies are typically where counselors can look for information on their states' processes except: A. Housing Department B. Attorney General's Office C. State Housing Finance Agency D. Department of Community Affairs E. All of the above

E. All of the above -Depending on the state, any one of these offices could have information on your state's foreclosure process

The following are reasonable options for a homeowner facing foreclosure except: A. Talk to servicer about modification or rapayment plan B. remain in the home without paying mortgage C. Establish an emergency budget to catch up on payments D. Send partial mortgage payments when possible. E. B and D

E. B and D. -You won't be able to stay in your home indefinitely if you don't pay your mortgage. In many cases, servicers will not accept partial payments.Typically extended nonpayment will result in foreclosure, leading to the eviction process