A delay in state legislation looks to create obstacles for Illinois brokers originating standard fixed rate reverse mortgages.
Illinois Legislature has delayed the exemption of reverse mortgages from its High Risk Home Loan Act until January 10, 2014, according to Weiner Brodsky Kider (WBK) PC, legal counsel for the National Reverse Mortgage Lenders Association.
The delay arrives on the heels of recent regulatory changes announced by the Consumer Financial Protection Bureau (CFPB) regarding the Home Ownership and Equity Protection Act (HOEPA).
To sync with the recent CFPB regulations, Illinois Legislature is currently delaying amendments to the High Risk Home Loan Act until certain sections pertaining to the Dodd-Frank Wall Street Reform and Consumer Protection Act go into effect in accordance with CFPB regulations.
Last year, Illinois Governor Pat Quinn signed the bill that exempted reverse mortgages from the state’s high-risk loans act.
For reverse mortgage brokers and lenders operating in the state, the passing of the bill helped level the playing field by making it easier to originate lower value loans.
“[Delaying the bill] is disadvantage all the way around,” says Mike Wyrostek, branch manager for Illinois-based MSI Reverse Mortgage. “For brokers and for borrowers.”
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