HUD CERTIFICATION LATEST UPDATE

HUD CERTIFICATION LATEST UPDATE Which document is most important when working with a client to develop an initial budget as part of a Client Action Plan? Pay stub Retirement plan statement List of assets Current lease - CORRECT ANSWER Pay stub A client would like purchase a home within one year. The client is motivated to increase household income as a way to save for a down payment and qualify for a loan. Which is the best solution for the client to reach this goal? Find a second job Borrow from retirement fund Sell major assets Find a temporary job through a staffing service - CORRECT ANSWER Find a second job A credit report may contain which information? The number of accounts in collection status A history of payments on an electric bill Income history Criminal record - CORRECT ANSWER The number of accounts in collection status A credit report contains inaccurate information. Which action item should the counselor include in the Client Action Plan? HUD CERTIFICATION LATEST UPDATE 2 | P a g e -Attach a letter to mortgage applications explaining the inaccuracies. -Investigate the reasons why the inaccuracies occurred to determine the responsible party. -Include a personal consumer statement on the credit report. -File a dispute with the appropriate credit reporting agency. - CORRECT ANSWER File a dispute with the appropriate credit reporting agency. Six months ago a client left a job as a reporter to start a business in the retail industry. To prepare to buy a house, the client closed credit card accounts and has been using savings to pay down credit card debt and collections. The client has not been able to save much for a down payment with all the debt payments but knows about an affordable home-ownership program that only requires a 1% down payment with an FHA loan. What might result from the client closing the credit card accounts? -It decreases credit utilization, causing a negative impact on the credit score. -It increases credit utilization, causing a negative impact on the credit score. -It increases credit utilization, causing a positive impact on the credit score. -It decreases credit utilization, causing a positive impact on the credit score. - CORRECT ANSWER It decreases credit utilization, causing a positive impact on the credit score. Which action would a client take to improve a credit score? -Request to expunge public records -Apply for new credit cards to increase credit -Cancel all credit cards -Pay delinquent accounts - CORRECT ANSWER Pay delinquent accounts HUD CERTIFICATION LATEST UPDATE 3 | P a g e A client does not receive a written monthly statement from the credit card company. Which credit law could this omission violate? -Fair Credit Billing Act -Fair Credit Reporting Act -Fair Housing Act -Fair and Accurate Credit Transactions Act - CORRECT ANSWER Fair Credit Billing Act A client shopping for a mortgage loan presents a housing counselor with an offer from a local mortgage lender. The interest rate on the offer is 7.5% for a 30-year fixed rate mortgage with a 20% down payment required. The counselor reviews the client file and determines the client's credit score is 725 and the client's total debt-to-income ratio is 20%. The client asks the housing counselor if the offer is a case of illegal predatory lending. How should the housing counselor respond? -"You have been a victim of predatory lending and should file a report with the Consumer Finance Protection Bureau (CFPB)." -"The loan seems reasonable. You might do better, but I cannot steer you to any particular loan originator." -"I am unable to determine whether the loan is predatory, but I suggest you shop around with other lending sources." -"I cannot offer legal advice, but I would not proceed with the loan." - CORRECT ANSWER "I am unable to determine whether the loan is predatory, but I suggest you shop around with other lending sources." Which action should a counselor recommend a client take first after discovering identity theft?