Florida Senator Introduces Reverse Mortgage Bill
February 23rd, 2010 | by admin Published in Legislation, News, Reverse Mortgage | 4 Comments
Florida Senator Mike Fasano recently introduced Senate Bill 1532 to provide specific requirements for reverse mortgage loans. According to the bill analysis, the provisions proposed would impact proprietary reverse mortgage programs not following the HECM provisions (e.g., disclosure and counseling).
Fasano told Tampa Bay Online "My primary concern is that not one senior citizen be taken advantage of by an unscrupulous lender of reverse mortgages”.
"Reverse mortgages can be a very good product when sold by reputable lenders to properly educated borrowers," Fasano added. "In the hands of unscrupulous people it could be a nightmare for a borrower."
The bill provides the following additional consumer protections for reverse mortgages through a mortgage broker loan regulated under ch. 494, F.S.:
- Counseling — Requires a lender to provide a borrower with a list of at least five HUD-approved counseling agencies; requires counseling session to include information regarding the financial implications of a reverse mortgage loan and other options, and prohibits a lender from accepting a final application or collecting any fees from a prospective borrower until the borrower has completed such counseling.
Cross Selling — Prohibits a lender from requiring an applicant to purchase an insurance or other similar financial product (excluding title insurance or hazard, flood, or other peril insurance) as a condition of obtaining a reverse mortgage.
Disclosures — Requires the lender to provide a disclosure in plain language to the borrower, prior to the loan closing, the terms and conditions of the loan, such as the interest rate, the term of the loan, schedule of payments, and conditions under which repayment is triggered.
Fees — Requires reverse mortgage loans to comply with all applicable state and federal standards.
In addition, the bill would require potential borrowers to be at least 62 years of age. If the bill is passed and made law, it would take effect July 1, 2010.
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February 23rd, 2010 at 12:21 pm (#)
not sure how this is any different than what is currently required by HUD. Do these regulators have a clue about the current process?
February 24th, 2010 at 7:48 am (#)
Just more of the same. If the government wants to protect the seniors, they should first educate themselves, then help us to educate the public. So very tired of hearing about the fraud…..let's start hearing about the positive, life changing benefits of these loans. I come from Mass and the last article posted in the consumer affairs office was full of incorrect information. Climbing uphill everyday is exhausing!!
February 24th, 2010 at 5:33 pm (#)
John,
This is something like the HECM rules being applied to all other reverse mortgage products. Not bad, in fact it is a good idea. Why legislators have to explain the rational of such bills with negative language about lenders is hardly constructive. It is simply bringing some of the safeguards of HECMs to all reverse mortgages.
February 25th, 2010 at 12:33 am (#)
John,rnrnThis is something like the HECM rules being applied to all other reverse mortgage products. Not bad, in fact it is a good idea. Why legislators have to explain the rational of such bills with negative language about lenders is hardly constructive. It is simply bringing some of the safeguards of HECMs to all reverse mortgages.