Minnesota Governor Veto’s Reverse Mortgage Bill

image Late yesterday, Minnesota Governor Tim Pawlenty vetoed SF 489 which could’ve had negative consequences for both seniors and reverse mortgage lenders.  The bill would’ve increased the rescission period for reverse mortgages to 10 days, added a suitability requirement, as well as increased restrictions on cross selling.

“The the intention of this bill is to protect borrowers from predatory lending practices, and I share that goal,” said a statement from Pawlenty.  He added, “However, this legislation may trigger unintended consequences and increase costs to consumers.”

In his statement, he encourages the authors of the bill to develop legislation that protects consumers from predatory lending practices but does not limit the availability of this type of product in Minnesota.  I couldn’t agree more.  Below is a copy of the official statement. 

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  • This is the result of a lot of “behind the scenes” work by NRMLA and our partners, including the in-house and contract legislative specialists from a couple of major lenders, the MN MBA, national MBA and several other interested parties. My thanks to all who have contributed to this effort. We fully anticipate this topic being brought up in next year’s session and hope that those interested in passing a bill in MN will work with us to achieve meaningful protections that do not inhibit seniors’ access to reverse mortgages.

  • Great news!! Well done NRMLA and all the rest who participated in unraveling this mess. My respect for Governor Pawlenty has just grown immensely.

  • Those of us in MN are very happy to have a Governor that can “see the forest for the trees” and therefore vetoed the bill in its current form. Although, the bill had good intentions the 10 day rescission would have eliminated the HECM for purchase program and most likely increased HECM costs in MN. This bill passesd with very few dissenting votes, even after NRMLA and Wells testified voicing their concerns. It’s nice knowing that in addition to the “big boys” efforts a grass roots effort by several individual mortgage bankers and brokers that inundated the governor’s office with phone calls, emails, and visits also aided in the veto. Note that there were enough votes to override the Govenor’s veto. Luckily, the session ended before any override could occur. This bill will come back but hopefully with the broken parts fixed.

  • Congratulations Governor Tim you did a good job to keep HECM’s available in Minnesota. Many deserving seniors will benefit by enjoying a new life style.This was a bad bill and the consumer minded activists just had bad ideas. The federal recission is there. Most importantly the lenders can have a closing and the seniors get their money on time.The people who wanted this bill don’t understand reverse mortgages.

  • I want to acknowledge Beth Paterson from Prestige Mortgage, Reverse Mortgages SIDAC for all the time and effort put into this legislation and getting this bill vetoed. The 10 day rescission period was about the most egregious feature in this bill and this was strongly fought by Beth. I found this interesting that NRMLA stated this is something they fought, but it was noticed that NRMLA and Wells Fargo didn’t make any strong testimony about this in any of the legislative hearings.

    Thanks to Beth and all others that passed along info and pleas to Governor Pawlenty to have this bill vetoed.

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