The Massachusetts Senate has introduced new legislation to establish specific reverse mortgage requirements for borrowers and lenders.
According to S2355, lenders are not allowed to originate a reverse mortgage loan unless the borrower “affirmatively opts in writing for the reverse mortgage and has received certification from a counselor with a thirdparty organization” and in person on the suitability of the loan.
In addition, the third party organization providing the counseling must be approved by the US Department of Housing and Urban Development and the Massachusetts Executive Office of Elder Affairs.
If a mortgagee doesn’t obtain evidence that the borrower has completed an approved counseling program the terms of the loan shall not be enforceable.
If passed, the Commissioner of Banks shall issue guidelines or adopt regulations to administer and carry out the bill and to further define the terms used in this section said S2355.