Is it more talk than action as many state lawmakers consider enacting new or additional legislation affecting reverse mortgages? According to James Milano, an attorney with the Washington, D.C. firm, Weiner Brodsky Sidman Kider, the urge to regulate may be reactionary. “State regulators may feel responsible for the subprime mortgage meltdown and don’t want to be fooled again,” he posited. Milano cites Washington State, California and Minnesota as having recently introduced bills and says “a couple of others may do something administratively.”
Further impetus may come from the fact that “government has a historically embedded role in reverse mortgages,” according to Peter Bell, president of the National Reverse Mortgage Lenders Association. That tendency could be played out in new state initiatives coalescing around “who can play – that is, loan-officer licensing, company approvals and product approvals,” he suggests.
Bell believes there must be a “simple format that gives the senior or their family all the pertinent information they need, detail by detail. It’s there now,” he acknowledges, “but it’s buried in a thick sheaf of papers that you have to go digging through, and you’re at the mercy of your loan officer to figure them out.”
According to a notice sent out to NRMLA members, the Board discussed a strategy for handling reverse mortgage legislation pending in California, Minnesota, Arizona and Washington last week. An email sent to NRMLA asking what the board plans on doing wasn’t returned at press time.