The Arizona House of Representatives passed HB 2242 by a vote of 47-10 and now moves to the Senate. Sponsored by Representative Bill Konopnicki, the bill requires originators follow certain guidelines when originating reverse mortgages in the state.
Specifically, the bill requires that adequate financial counseling be provided by an independent third party which is not associated with or paid by a party who originates or services the reverse mortgage, funds the loan, or sells any financial or insurance products.
In addition, HB 2242 orders that at least ten days before closing, the originator must provide the borrower with access to a statement that informs the borrower of their liability under the reverse mortgage is limited and “explains the borrower’s rights, obligations, remedies with respect to temporary absences from the home, late payments and payment default by the originator and all conditions requiring satisfaction of the loan obligation.”
The bill also directs the originator to fully disclose in writing all costs involved with the loan before entering into a reverse mortgage.
NB 2242 now moves on to the Senate, where the National Reverse Mortgage Lenders Association said it’s seeking additional technical changes be made to the bill. According to an alert to members, the chief sponsors of the bill have indicated their willingness to continue working with NRMLA to address these issues.