Understanding Mortgage Options, Fees, and Fair Housing Laws in Counseling, Exams of Business Systems

Download Understanding Mortgage Options, Fees, and Fair Housing Laws in Counseling and more Exams Business Systems in PDF only on Docsity! HUD Knowledge Assessment Exam Questions with 100% Answers 2024 Which is the maximum recommended housing ratio for renting an apartment? 30% Eligibility requirements for down-payment assistance programs include which factors? Income, home-buyer education, purchase price The client is considering an FHA mortgage. What is the upfront mortgage insurance premium (UFMIP) for an FHA mortgage? 1.75% If the client was denied a mortgage loan and the lender told him to come back after his divorce had been final for three years, what is the best advice for the housing counselor to provide to the client to report a violation to ECOA? Contact the Federal Trade Commission as the lender's action might violate the Equal Credit Opportunity Act A question from a lender on the client's Medical History would be inappropriate or appropriate? Inappropriate Who is responsible for educating home-buyers about their rights? Housing Counselor In order to minimize the impact on the client's credit score, what is the maximum time frame within which the client should apply for pre-approval from multiple lenders? A 30-day period Which is the best reason that a housing counselor would suggest that a client speak to three to five different lenders? To compare loan estimates Which is the best advice that a housing counselor can give the client to protect against identity theft? Review credit report at least once per year The client tells the lender that he is expecting a raise soon. Should the Lender provide a Loan Estimate (LE) with, or without factoring the raise? Provide a loan estimate without factoring in the raise If this client obtains a mortgage of $100,000, typically, how much should he expect to pay for closing costs? $3000 to $4000 Is Application Fee an upfront cost of clients who are considering renting or buying a property? Renting A client wants to customize his home with do-it-yourself projects, this is an indication the client is best aligned with which housing option; Home-ownership or Renting? Home-ownership The client's gross monthly income is $4167 and the monthly debts are $435. What is the maximum mortgage payment (rounded to the nearest dollar) for which this client would qualify using a standard conventional loan? $1,065 NOTE: The maximum front-end ratio for a standard conventional loan is 28%, and the back-end ratio is 36%. The front-end ratio is calculated as 28% of the client's monthly income of $4,167, which is $1,167. The back-end ratio is calculated as 36% of the client's monthly income of $4,167 minus the client's monthly debt of $435, which equals $1,065. Therefore, the maximum loan payment that the client qualifies for is the lower of the two numbers, which is $1,065. Which is the maximum debt-to-income ratio allowable for an FHA loan? 43% Which is the maximum debt-to-income ratio allowable for an FHA Energy Efficiency Mortgage loan? 45% The client's gross monthly income is $4167 and the monthly debts are $435. With a monthly mortgage payment of $950, which is the client's debt-to-income ratio (round to the nearest whole percent)? 33% The client's gross monthly income is $4167 and the monthly debts are $435. If the client seeks an FHA Energy Efficient Mortgage (EEM) loan, what is the maximum housing payment for which he can qualify (rounded to the nearest dollar)? $1,292 On which factor is a borrower's annual mortgage insurance premium (MIP) based? Current principal balance NOTE: The annual mortgage insurance premium (MIP) is based on the unpaid principal balance of the loan. The loan-to-value ratio is used to determine when private mortgage insurance (PMI) can be dropped from the loan. Credit scores do not affect MIP but might affect PMI. Which is the upfront mortgage insurance premium (UFMIP) if the client purchases a home with an FHA loan amount of $116,000? $2,030 The client only tracks bill payments. Which should the housing counselor recommend to help the client begin planning for a home purchase? A- Continue to track bill payments only B- Track income only C- Track all income and expenses D- Track savings deposits and expenses C- Track all income and expenses account. Her goal is to use this money towards her down payment. Which action should the housing counselor suggest to this client? A- Move the funds into a mutual fund B- Move funds to a large purchase savings account with limited accessibility C- Leave the money in her current checking account for easy access D- Move funds into a long-term Certificate of Deposit Move funds to a large purchase savings account with limited accessibility The client wants to move her family to a lower-priced rental unit to save money for a home, but is struggling with the upfront fees required to move to a new apartment complex. Which strategy would be most effective to help the client secure affordable housing and cover moving expenses quickly? A- Submit application for a housing voucher B- Find an individual landlord and negotiate C- Save for the move instead of paying utilities D- Apply for a loan to cover expenses Find an individual landlord and negotiate Which type of lease and tenancy best protects the tenant? A- An oral lease with tenancy at will B- A written lease with contractual tenancy C- A written lease with tenancy at will D- An oral lease with tenancy at sufferance A written lease with contractual tenancy The client wants to purchase a new home, but her lease might expire before she can move into it. Which is the best advice for the housing counselor to provide? A- Discuss a tenancy-at-sufferance agreement with the current landlord B- Stay in her current unit until the landlord evicts her C- Find a seller who will allow her to move in before closing D- Contact local Public Housing Agencies A- Discuss a tenancy-at-sufferance agreement with the current landlord Which tactic would be most effective for the client to encourage a positive landlord-tenant experience during a tenant initiated early lease termination? A- Stop paying rent immediately B- Request return of the security deposit C- Leave furniture for an incoming tenant D- Communicate well with the landlord D- Communicate well with the landlord Which additional information would the housing counselor need to prepare the action plan for this client? A- Documentation of life insurance payout B- Client's current lease agreement C- Documentation of household expenses D- Listings for properties the client is interested in purchasing Documentation of household expenses Which is the best recommendation the housing counselor should give this client to help improve her credit score? A- Set up automatic credit card and loan payments to ensure on time payment B- Apply for a loan to consolidate the credit card and auto loan balances C- Apply for a credit card with a lower interest rate and transfer the balance of the current card D- Pay more than the minimum payment each month to reduce the credit card balance D- Pay more than the minimum payment each month to reduce the credit card balance Which factor would most likely impact the client's housing affordability in the future? A- A reduction in income when the survivor benefit runs out when children turn 18 B- The need for a second car when the children start to drive C- Selecting a 30-year fixed rate mortgage versus a 15-year fixed rate mortgage D- The cost of home repairs and maintenance A- A reduction in income when the survivor benefit runs out when children turn 18 The client currently pays $2,050 in rent, though her mortgage payment could be higher. Which is the most effective strategy to be able to manage a higher payment? A- Withdraw retirement account funds to pay down car and credit card balances B- Delay home purchase until the car loan is paid off C- Consolidate car loan and credit card balances D- Utilize savings to pay the mortgage in the future B- Delay home purchase until the car loan is paid off Which was instituted by Congress to better protect home-buyers following the most recent housing crisis? A- Federal Trade Commission B- National Mortgage Settlement C- Consumer Finance Protection Bureau D- Truth In Lending Act C- Consumer Finance Protection Bureau Which initiative encourages housing counseling agencies to advocate that lenders operate in underserved areas? A- Affirmatively Furthering Fair Housing B- Fair Housing Initiatives Program C- Fair Housing Testing Program D- Fair Housing Assistance Program A- Affirmatively Furthering Fair Housing Which action taken by a housing counseling agency would affirmatively further fair housing? A- Report potential violations to the local fair housing authority B- Create an outreach campaign designed to raise awareness about critical housing topics C- Accompany clients when viewing properties to ensure they are treated fairly D- Discourage tenants from seeking housing with landlords who appear to consistently engage in discriminatory practices B- Create an outreach campaign designed to raise awareness about critical housing topics Which section of a credit report shows a client's payment history? Account information Which is the maximum payment (rounded to the nearest dollar) for principal, interest, taxes, insurance, and association fees (PITIA) this client can afford according to FHA back-end ratio guidelines? Assets, $58200, Total Gross Monthly Income $6400 Debt Expenses $615, Household Expenses $4679 $2137 NOTE: The back-end ratio includes total principal, interest, taxes, and insurance, plus other monthly debt. The maximum back-end ratio for FHA is 43%. The client's total monthly income is $6,400, and her total monthly debt is $615. Forty-three percent of $6,400 is $2,752. Subtracting the total monthly debt from $2,752, the remainder is $2,137, which is the maximum total principal, interest, taxes, insurance, and association fees (PITIA) payment. Reference: Module 2.1 Renting vs. Buying Page Number 21 to 24 Which is the down payment required if the client purchases a $375,000 home with an FHA mortgage? $13,125 NOTE: The down payment would be 3.5% of the $375,000 purchase price, which is $13,125 ($375,000 multiplied by 0.035 equals $13,125). The client attempted to purchase a condo six months ago but was denied. The mortgage required a minimum credit score of 640, 3% down payment and a 35% front-end ratio and a 43% back- end ratio. The purchase price was $225,000 with a down payment of $45,000, monthly principal and interest payment of $939, property taxes of $196 and a homeowner association fee of $228 for a total monthly payment of $1,363. During the intake process, she was asked about her children and her responsibilities as a mother. Which government rule or regulation may have been violated when the loan officer denied the loan for the condo? Fair Housing Act Which is the best advice a housing counselor can provide about an emergency preparedness plan? A- Make a plan for all emergencies to ensure the safety and security of family members B- Assign responsibilities only to adults in the event of a disaster C- Plan a way to seal off the home if advised by authorities to shelter in place D- Plan a safe escape route from the home D- Plan a safe escape route from the home Which is the best advice a housing counselor should give the client about an emergency preparedness plan? A- Designate a nearby restaurant as a meeting spot B- Ensure that valuables are retrieved from the safe during a fire C- Encourage involvement of the entire family D- Make sure everyone has a spare cell phone to communicate C- Encourage involvement of the entire family Which is the best financing option for the client to complete multiple home repairs over time without refinancing? A- Home Equity Line of Credit B- FHA 203K Loan C- Streamlined 203k Loan D- Home Equity LoanA- Home Equity Line of Credit This client has $25,000 of equity in her home and needs $49,000 to replace her windows and pipes. Which finance option should the housing counselor recommend? A- Conventional Mortgage B- Second Mortgage C- FHA 203k D- Home Equity Line of Credit C- FHA 203k NOTE: An FHA 203k loan is based on the future value of the property after repairs and will provide the funds for home improvements beyond the current equity in the house. Which is the key advantage of the client using a real estate agent versus selling her house on her own? A- Real estate agents offer legal advice about the home buying process. B- Real estate agents perform the home inspection. C- Real estate agents negotiate on behalf of the client. D- Real estate agents explain homeowner's insurance to the buyer. C- Real estate agents negotiate on behalf of the client. Which document should the client expect to sign to begin the home sale process? A- Uniform Residential Loan Application B- Upfront commission arrangement C- Listing agreement D- Home inspection contract C- Listing agreement The client decides to sell her home and wants to complete various home repairs before listing the property for sale. Which is the best reason to complete the repairs? A- Eliminates the need for property disclosure because repairs are visible B- Protects the client from potential lawsuits resulting from disrepair C- Reduces the need for a home inspection, saving the buyer money D- Helps the seller prepare for the home inspections D- Helps the seller prepare for the home inspections The client was laid off from her job five months ago. She is three months past due on her mortgage and is concerned about losing her home. She is receiving unemployment payments of $1,950 per month and receives Social Security Survivor benefits of $1,400 per month. She wants to know what her options are. Her mortgage payment is $2,050 per month including property taxes and insurance. Her debt obligations total is $375. She has exhausted her reserves. Which characteristic of this client's situation disqualifies her for the FHA-HAMP Loan Modification Program? The client is eligible for another FHA loss mitigation option. NOTE: Since this client is receiving unemployment, she is eligible for the FHA Special Forbearance - Unemployment Agreement. The FHA-HAMP Loan Modification Program is only available to clients who are not eligible for any other loss mitigation program. Which is the best option for a client if she cannot sell her home and she does not want to try to keep it? A- Deed-in-lieu of foreclosure B- Walk away from the home C- Loan modification D- Forbearance agreement A- Deed-in-lieu of foreclosure Which is the most likely consequence of a short sale? A- The client may need to make arrangements to pay off mortgage deficiency. B- The forgiven mortgage deficiency may be treated as taxable income. C- The mortgage deficiency may be added to the future sales price of the home. D- The mortgage company may sue the homeowner for the deficiency amount owed. B- The forgiven mortgage deficiency may be treated as taxable income. NOTE: Most short sales will have a deficiency, but in most cases the lender will not require payment of the remaining balance and can request that the option for a deficiency judgment be removed. However, the forgiven balance may be treated as taxable income for the borrower. The client is afraid her servicer might begin foreclosure proceedings immediately and force her out of her home. Which information should the housing counselor provide? A- As long as the client is working with a housing counselor, the servicer cannot file for foreclosure. B- A mortgage servicer cannot make a first notice for foreclosure until a borrower is more than 120 days delinquent. C- If the client makes a partial payment, it will delay foreclosure. D- The client is not yet in default. B- A mortgage servicer cannot make a first notice for foreclosure until a borrower is more than 120 days delinquent. If the client decides to leave the home, which option would most likely require the least amount of time? A- Deed-in-lieu B- Foreclosure C- Short sale D- Pre-foreclosure sale A- Deed-in-lieu If the servicer cooperates, a deed-in-lieu will take the least amount of time. The foreclosure process can vary from state to state and can take several months to several years to complete. A short sale is "short" on the principal balance of the loan, though the timeline for completion is typically not very short. Pre-foreclosure sale means selling the property prior to foreclosure, which may or may not be a short sale. Reference: Module 5.3 Disposition Options Page Number 4 to 6 The client is also behind on her credit card debt and has only a few job prospects. She is considering filing for bankruptcy but wants to keep her home. Which advice should the housing counselor provide? A- Suggest the client file for a Chapter 13 bankruptcy B- Suggest the client file for a Chapter 7 bankruptcy C- Provide the client with the name of a bankruptcy attorney D- Explore loss mitigation options available D- Explore loss mitigation options available Which is a bankruptcy qualification that considers income and equity in assets to determine if a client has the ability to repay part of the debt? Means test Which action would be most likely to have the greatest positive impact on the clients' credit score? A- Opening a new secured credit card B- Paying down their credit card balances C- Paying off and closing one card D- Opening a department store charge card Paying down their credit card balances Which is an eligibility factor for the Earned Income Tax Credit? A- Having a qualifying child B- Pursuing post-secondary education C- Filing as head of household D- Receiving wages D- Receiving wages The clients obtained the mortgage in 2006 from a broker who told them that they did not need any proof of income, savings, or assets. Which instrument was put into practice after the mortgage crisis in 2008 that changed this for future loans? Ability to Repay/Qualified Mortgage Rule Which is an example of a change enacted by Consumer Finance Protection Bureau (CFPB) that would help a client prepare for the mortgage loan process? A- Protection of military personnel and their dependents in issues related to housing of contact for loss mitigation efforts B- Penalization of five financial institutions for deceptive lending and foreclosure practices C- Requirement for servicers to appoint a single point of contact for loss mitigation efforts D- Easier-to-use mortgage disclosure forms that clearly outline the terms of a mortgage to the borrower D- Easier-to-use mortgage disclosure forms that clearly outline the terms of a mortgage to the borrower Which satisfies a housing counseling agency's requirement to Affirmatively Further Fair Housing? A- Reviewing marketing materials of local mortgage lenders B- Giving a donation to a homeless shelter C- Appointing a local lender to the board of directors D- Creating a hiring policy that encourages diversity in staff A- Reviewing marketing materials of local mortgage lenders Which Affirmatively Furthering Fair Housing action might benefit a client? A- Settle fair housing complaints on behalf of the client B- Commence a civil action in an appropriate U.S. district or state court on behalf of the client C- Require banks to operate in areas that are underserved D- Conduct educational initiatives to inform people about fair housing obligations D- Conduct educational initiatives to inform people about fair housing obligations The clients tried to apply for a mortgage with a couple of online mortgage providers but were rejected due to excessive debt. Which should the counselor advise the clients to do after being rejected for a mortgage loan? A- File bankruptcy to wipe away their debt. B- Dispute open accounts with creditors. C- Pay down debt and keep balances low moving forward. D- Take out a new loan to increase available credit. C- Pay down debt and keep balances low moving forward. One of the clients' relatives agreed to give them funds for the entire downpayment on the home. For which mortgage product did they most likely qualify? A- VA B- Conventional C- USDA D- FHA D- FHA NOTE: FHA is the only mortgage loan product that allows family assistance. USDA and VA do not require down payment, and most conventional loans generally will not allow funds other than those from the borrower as a down payment. Reference: Module 2.2 Affordable Housing Options, Page Number 5 to 16 The couple decides to apply for a loan modification and shows the counselor an advertisement that guarantees a government-approved loan modification for a $1,500 fee. Which is the best advice the counselor can give? A- Contact the Consumer Finance Protection Bureau to see if the company can be trusted B- Shop around for the lowest price to obtain a loan modification C- Contact the Better Business Bureau to see if the company can be trusted D- Report the company to the Federal Trade Commission because no company can guarantee loan modifications D- Report the company to the Federal Trade Commission because no company can guarantee loan modifications If the clients are worried about the cost of homeowners insurance for their new home, which would most likely qualify them for discounts from insurance agents? A- Installing deadbolts for security B- Inviting the fire department to inspect the home C- Being close to the local police station D- Keeping a firearm in the home for protection A- Installing deadbolts for security The clients paid below market price for their home and have some equity available. They are considering financing repairs to their roof, but they do not want to pay for this project over an extended period of time. Because they just closed on their mortgage, they do not have a lot of funds available. Which is the best financing option for the clients? A- Home Equity Loan B- Home Equity Line of Credit C- Cash-out Refinance D- FHA 203k Loan A- Home Equity Loan Before the clients purchased their home, they discussed emergency preparedness with their counselor. Which would be the best advice the counselor could give on that topic? A- Set an evacuation location for family members in school or daycare B- Create a plan to communicate with the household C- Create a plan to evacuate the vehicles from the property D- Prepare for every possible emergency and disaster B- Create a plan to communicate with the household Which is an appropriate feature of a safe room? Few or no windows NOTE: A safe room should have few-to-no windows, as that makes it less likely that safety will be compromised. Rooms on the interior of the home and rooms without doors to the outside are preferable for this same reason. The size of a room has little bearing on whether it is an appropriate safe room. The client and her husband purchase the home and things are fine for the first couple of months. After the wife exhausts all her maternity benefits, their income becomes dramatically reduced and fail to make several mortgage payments. Because they were so embarrassed by missing their mortgage payment so soon after buying the home, the couple has avoided speaking to their mortgage servicer, despite several attempts by the servicer to get in touch. Now they've received a letter threatening foreclosure. Panicked, they reach back out to the housing counselor for help. Which characteristic of this situation makes the clients ineligible for the Fannie Mae or Freddie Mac Flex Modification Program? A- The clients are in imminent default. B- The wife is still employed while on medical leave. C- The clients are more than 60 days past due. D- The loan originated less than 12 months ago. D- The loan originated less than 12 months ago. NOTE: The Fair Credit Reporting Act allows consumers to dispute inaccurate information on their credit reports. Each of the other regulations offers some protection for consumers, but none applies to this situation. Reference: Module 1.2 Credit Page Number 16 to 17 Which situation most likely indicates a loan modification scam? A- The client receives a letter from a housing counseling agency explaining possible workout options B- The client receives a letter from a company guaranteeing a loan modification C- The client's lender defers some principal so monthly payments are reduced D- The client's lender offers to reinstate the loan by establishing an affordable monthly payment plan A- The client receives a letter from a housing counseling agency explaining possible workout options Housing counselors should refer clients to other agencies when they seek which type of advice? A- Advice on where to look for affordable housing B- Advice on where to find emergency rental assistance C- Advice on suing their landlord D- Advice on whether they might be eligible for a reasonable accommodation C- Advice on suing their landlord NOTE: Housing counselors should refer clients to legal aid providers when clients need legal advice. Housing counselors are expected to provide advice on what might qualify as a reasonable accommodation and where to find affordable housing and rental assistance. Reference: Module 6.2 Eviction Page Number 13 to 13 he client earns $3,000 in wages per month and will receive $700 per month in child support, once an agreement is finalized, has $2,000 in savings. She wants to by within 6 months, and plans to obtain FHA financing, which requires a 3.5% down payment, the average price of homes in the area is $100,000. She qualifies for a local down payment assistance program which pays for closing costs and prepaid expenses up to $4,000. She had a Chapter 7 bankruptcy discharged successfully 18 months ago, and she recently paid off an auto loan and student loans, her credit score is 620, her lease expires in two months, but the property manager will allow for a six-month lease extension. Which aspect of this client's situation requires her to wait six months before she can purchase a home? A- The client's current housing ratio is 36%. B- The client's credit score is 620. C- The client's child support cannot be counted as income unti D- The client's bankruptcy was discharged 18 months ago. NOTE: The client's credit score of 620 could qualify her for a mortgage, and her rental housing ratio is not a determining factor for mortgage qualification. Typically, in order to qualify for a mortgage, the client's Chapter 7 bankruptcy must have been discharged for at least two years, and she needs to save enough money for down payment and closing costs. The client has two months left on her lease and seeks a six-month extension. There is no indication that it will take longer than eight months after the divorce for the child support to be finalized, so it can be counted as income. Reference: Module 1.4 Protecting Assets Page Number 11 to 18 How much should a housing counselor recommend the client save in an emergency fund? A- 2% of net income B- 10% of net income C- 1 to 2 months of living expenses D- 3 to 6 months of living expenses D- 3 to 6 months of living expenses A client who is a single mother of two young children meets with a housing counselor to create a spending plan that helps her manage her finances better and improve her credit score. She has been employed at her job for two years. She works 40 hours per week and earns $12 per hour. She does not receive child support and her monthly income barely covers her monthly expenses, so she is unable to save. She has one secured credit card and $5,000 of bad debt, which has been in collection for three years. She also has an outstanding judgment for $1,800 from a previous landlord when she was evicted three years ago. She has a credit score of 580. Due to her past credit history, she is renting from a private landlord. Which is the maximum amount that this client could afford for monthly rental payment (rounded to the nearest dollar)? $624 per month NOTE: An affordable rental payment should be no higher than 30% of client's gross income. $12/hr x 40 hrs per week equals $480/week multiplied by 52 weeks; divided by 12 months equals $2,080 monthly gross income; 30% of $2,080 equals $624 Which step would most likely prevent future rental disputes? A- Apply for rental assistance programs B- Obtain renter's insurance C- Enter into an oral lease agreement D- Abide by the lease agreement D- Abide by the lease agreement A client who is a single mother of two young children meets with a housing counselor to create a spending plan that helps her manage her finances better and improve her credit score. She has been employed at her job for two years. She works 40 hours per week and earns $12 per hour. She does not receive child support and her monthly income barely covers her monthly expenses, so she is unable to save. She has one secured credit card and $5,000 of bad debt, which has been in collection for three years. She also has an outstanding judgment for $1,800 from a previous landlord when she was evicted three years ago. She has a credit score of 580. Due to her past credit history, she is renting from a private landlord. Which step should be included in a Client Action Plan to best help this client qualify for rental housing at an apartment complex? A- Pay off the $1,800 judgment B- Apply for a new job C- Pay off the $5,000 ba A- Pay off the $1,800 judgment NOTE: Paying off the $1,800 judgement most likely will help improve the client's credit. Given that the judgement was for a previous eviction, paying it off could also help the client's chances of getting into a better rental. On the other hand, closing the secured credit card could actually hurt the client's credit, because it appears to be the only positive item on the client's credit report. Also, the client's current employer indicated the possibility of a promotion; therefore, looking for a new job may not be a good step. Paying off the $5,000 bad debt will improve her credit, but that is unrelated to her past rental history. Reference: Module 1.1 Budget Page Number 18 to 20 The client has no savings but thinks she can afford a home if the monthly mortgage payment equals her rental payment. Which costs will prevent this client from purchasing a home? A- Property maintenance expenses B- Principal, interest, taxes, insurance, and association fees (PITIA) C- Pet deposit for pet owners D- Closing costs D- Closing costs Closing costs average between 3% to 4% of the home purchase price based on a variety of factors and may be higher or lower. It is important for the client to understand that this may be a major cost when purchasing a home, and that having no savings to use will prevent her from purchasing. It also helps the client understand the importance of identifying all costs and not just comparing monthly payment amounts. A pet deposit is an expense, but is only a rental expense. The property maintenance expense will apply only after she purchases the home. Reference: Module 2.1 Renting vs. Buying The client tells her housing counselor that her employer has accessed her credit report without her consent. Which law protects the client from this action? A- Fair Credit Reporting Act (FCRA) A- Advise the client to contact the landlord and inform him of his mistake B- Advise the client to file a complaint with a fair housing agency or HUD C- Advise the client that he cannot file a fair housing complaint D- Advise the client to sue the landlord for discrimination C- Advise the client that he cannot file a fair housing complaint. Unfortunately, fair housing complaints are only valid if they are filed within a year of the alleged violation. Since 18 months have passed since the incident, the client has eclipsed his window to file a complaint. He no longer has any recourse to pursue with regard to the violation. Contacting the landlord and informing him of his mistake, while potentially personally satisfying, may only lead to a further conflict without hope of resolution. Legal actions such as lawsuits are not within the professional expertise of housing counselors and should be handled with referrals. Reference: Module 3.2 Violations & Complaints If the client had filed a complaint 10 months after the incident, and HUD concluded that the landlord violated fair housing laws, which is the most likely result of the complaint? A- HUD seeks a conciliation agreement with the client and the landlord. B- HUD asks the Attorney General to issue a warrant for the landlord's arrest. C- HUD authorizes civil action for relief on behalf of the victim. D- HUD revokes the landlord's ability to rent units to the public. A- HUD seeks a conciliation agreement with the client and the landlord. HUD will seek the most reasonable course of action to protect the victim and the public interest in fair housing complaints. If the intent of the client is to inform the landlord of their mistake and to ensure that it does not happen again, then a conciliation agreement will achieve both of those ends; it should be noted that these agreements are voluntary for both claimants and respondents. HUD authorizes a civil action for relief in circumstances in which the client's or the public's well being is immediately at stake. HUD does not have the authority to have anyone arrested or to revoke their ability to manage their property. Reference: Module 3.2 Violations & Complaints What is the maximum number of days after filing a complaint that HUD must conclude an investigation? 100 During a party at the client's apartment, a friend stumbles over a hoodie and falls down the stairs, crashing into the client. The friend breaks his leg and the client drops his cell phone, breaking it. Which feature of renter's insurance is most relevant to this incident? A- Content coverage could replace the client's broken cell phone. B- Personal liability coverage could protect the client from related legal action. C- Loss of use coverage could pay for a hotel room while the police investigate the incident. D- Incidental business liability coverage could pay for the friend's hospital bills. B- Personal liability coverage could protect the client from related legal action. NOTE: Personal liability coverage could cover potential legal actions related to the accident. The accident likely will not be considered a qualifying peril to replace the client's phone, and it is unlikely the incident would put the client out of his apartment temporarily. Incidental business liability coverage would not come into play, as this is not a claim relating to a business in the home. Reference: Module 6.1 Obtaining and Maintaining Tenancy