A comparison bill to SB 1532 was introduced to the Florida House of Representatives Insurance, Business & Financial Affairs Policy Committee. HB 845 would subject proprietary reverse mortgage to many of the same requirements that the Federal Housing Administration’s HECM program must meet, including those requiring counseling and disclosure of certain terms and limiting cross-selling said the bill’s analysis.
The bill also provides certain requirements for reverse mortgages. Specifically, that prepayments be allowed without penalty, interest rates may be fixed or variable and may include interest contingent on the property’s value at the time of the loan.
In addition, the lender must provide disclosures to the borrower before the loan closing, including information regarding the Interest rate, term of the loan, schedule of advancements, and conditions under which repayment is triggered.
The bill also states that a lender may not condition the reverse mortgage on the applicant purchasing an insurance annuity or other financial product, excluding those customary for mortgages. This includes offering such financial products to the borrower, or referring the borrower to anyone else for such purchase, before closing or the borrower‟s right to rescind the loan agreement.
If passed, the law would become effective July 1, 2010.