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« RBS Looking to Package Reverse Mortgage Products
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California Reverse Mortgage Bill Passes Senate, Sent to Governor Schwarzenegger

September 17th, 2009  |  by Jim Veale Published in Legislation, News, Reverse Mortgage  |  2 Comments

Assembly Bill (AB) 329 was amended and passed in the California state Senate on September 1, 2009 and on September 3, 2009, the California state Assembly passed AB 329 as amended by the California state Senate.

Late last week, the bill was enrolled and sent to California Governor Arnold Schwarzenegger for his expected signature. AB 329 was originally introduced into the Assembly by Assemblyperson Mike Feuer (D‑Los Angeles), Chairperson of the Committee on Judiciary of the California state Assembly, on February 18, 2009.

If enacted by the Governor, the provisions of AB 329 will be administered by both the California Department of Real Estate (DRE) as to those licensees who are providing reverse mortgages using DRE licenses and the California Department of Corporations as to those providing reverse mortgages under California banking and California financial lender (CFL) laws.

Before original passage by the California state Assembly in May, 2009, AB 329 was an overly ambitious bill designed to regulate the reverse mortgage industry. Its measures would have throttled the reverse mortgage industry in California. Luckily, industry participants along with NRMLA worked hard to get many of the needed amendments to AB 329 but certainly not all. Although there are still several objectionable features and wording, the California state Senate successfully removed the features that were the most potentially bothersome.

Also, the competing but far less ambitious bill initiated in the California state Senate by Senator Lois Wolk (D-Davis), Senate Bill (SB) 660, was shelved as unfinished business in the Senate on September 11, 2009. In almost all ways SB 660 would have been preferred to AB 329. Unfortunately California lawmakers have a different view of needed reforms.

California Senator Alan Lowenthal (D-Long Beach) and his legislative staff along with the legislative staff of Assemblyperson Mike Feuer worked behind the scenes to delete the “additional income” language found in California Civil Code Section 1923.5 in reference to reverse mortgage proceeds. This is a major step forward in helping seniors and their advisors understand the true nature of reverse mortgages.

While SB 660 is intriguing for its more conservative approach to reform, SB 660 at this point seems to be nothing more than an interesting note in California legislative history. NRMLA will be dedicating two sessions of its National Convention in November to California issues including AB 329 and SB 660.

James E. Veale, CPA, MBT
SVP of Tax and Government Affairs & Director of Originator Recruiting for Security One Lending

Technorati Tags: Reverse Mortgage,News,HECM,FHA,HUD,California,Legislation

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  • Louise321

    “If enacted by the Governor, the provisions of AB 329 will be administered by both the California Department of Real Estate (DRE) as to those licensees who are providing reverse mortgages using DRE licenses and the California Department of Corporations as to those providing reverse mortgages under California banking and California financial lender (CFL) laws.”

    So these provisions will not apply to employees of federally chartered banks, is that correct? Not a level playing field.

  • Anonymous

    “If enacted by the Governor, the provisions of AB 329 will be administered by both the California Department of Real Estate (DRE) as to those licensees who are providing reverse mortgages using DRE licenses and the California Department of Corporations as to those providing reverse mortgages under California banking and California financial lender (CFL) laws.”rnrnSo these provisions will not apply to employees of federally chartered banks, is that correct? Not a level playing field.

.

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