Foreclosure and Mortgage Default – HUD
Counselor Module
Nonpayment of a mortgage debt. Typically considered this when a payment has not been made
after 60-90 days. For FHA loans, it is only 30 days. - correct answer ✔✔Default
At-least one full payment is past due (like if it is due the 1st, and it is now the 2nd) - correct
answer ✔✔Delinquent
Requires a court decision to execute the foreclosure. Typically a longer process than non-judicial
foreclosures and more expensive for the lender. - correct answer ✔✔Judicial Foreclosure
A payment not received on the first day of the month. - correct answer ✔✔Late Payment
Foreclosure process is handled through letters and public notices and does not require the use
of courts. - correct answer ✔✔Non-Judicial Foreclosure
A specific time period that the homeowner can buy back or reclaim their property from
whoever purchased it at the foreclosure sale. - correct answer ✔✔Redemption Period
Investor & Servicer (Investor is the original lender who has kept ownership of the loan or
another entity that purchased the loan from the original lender. They also receive the proceeds
from the monthly principal and interest payments that the homeowner makes). Servicer
(Financial companies that negotiate mortgage delinquency resolutions with homeowners). -
correct answer ✔✔Key Players In Foreclosure Counseling
CFPB: Consumer Financial Protection Bureau - correct answer ✔✔This agency abolished the
practice of Dual Tracking by servicers
, Making Home Affordable - correct answer ✔✔The program helped homeowners avoid
foreclosure, stabilize the housing market, and improve the economy
National Mortgage Settlement - correct answer ✔✔This program penalized five financial
institutions for deceptive and misleading foreclosure practices
C. What were your ratios when your loan was initially approved for purchase? - correct answer
✔✔What of the following is not one of the initial steps a housing counselor will ask the client
during the first loss mitigation appointment?
A. What is the reason for your delinquency/ what is your hardship?
B. What type of mortgage do you have?
C. What were your ratios when your loan was initially approved for purchase?
D. Has any or all of your income been restored, indicating your serious delinquency might be
curable?
B. Subprime Lending - correct answer ✔✔The terms Ability to Repay and Qualified Mortgage
were defined in regulations implemented by the Consumer Finance Protection Bureau because
of what industry wide problem?
A. Loan Modification Scams
B. Subprime Lending
C. Blockbusting
D. Jumbo Lending
Loan to borrowers with poor credit. Typically charge higher interest rates to insure against
losses. - correct answer ✔✔What is Subprime Lending?
Counselor Module
Nonpayment of a mortgage debt. Typically considered this when a payment has not been made
after 60-90 days. For FHA loans, it is only 30 days. - correct answer ✔✔Default
At-least one full payment is past due (like if it is due the 1st, and it is now the 2nd) - correct
answer ✔✔Delinquent
Requires a court decision to execute the foreclosure. Typically a longer process than non-judicial
foreclosures and more expensive for the lender. - correct answer ✔✔Judicial Foreclosure
A payment not received on the first day of the month. - correct answer ✔✔Late Payment
Foreclosure process is handled through letters and public notices and does not require the use
of courts. - correct answer ✔✔Non-Judicial Foreclosure
A specific time period that the homeowner can buy back or reclaim their property from
whoever purchased it at the foreclosure sale. - correct answer ✔✔Redemption Period
Investor & Servicer (Investor is the original lender who has kept ownership of the loan or
another entity that purchased the loan from the original lender. They also receive the proceeds
from the monthly principal and interest payments that the homeowner makes). Servicer
(Financial companies that negotiate mortgage delinquency resolutions with homeowners). -
correct answer ✔✔Key Players In Foreclosure Counseling
CFPB: Consumer Financial Protection Bureau - correct answer ✔✔This agency abolished the
practice of Dual Tracking by servicers
, Making Home Affordable - correct answer ✔✔The program helped homeowners avoid
foreclosure, stabilize the housing market, and improve the economy
National Mortgage Settlement - correct answer ✔✔This program penalized five financial
institutions for deceptive and misleading foreclosure practices
C. What were your ratios when your loan was initially approved for purchase? - correct answer
✔✔What of the following is not one of the initial steps a housing counselor will ask the client
during the first loss mitigation appointment?
A. What is the reason for your delinquency/ what is your hardship?
B. What type of mortgage do you have?
C. What were your ratios when your loan was initially approved for purchase?
D. Has any or all of your income been restored, indicating your serious delinquency might be
curable?
B. Subprime Lending - correct answer ✔✔The terms Ability to Repay and Qualified Mortgage
were defined in regulations implemented by the Consumer Finance Protection Bureau because
of what industry wide problem?
A. Loan Modification Scams
B. Subprime Lending
C. Blockbusting
D. Jumbo Lending
Loan to borrowers with poor credit. Typically charge higher interest rates to insure against
losses. - correct answer ✔✔What is Subprime Lending?
