The Massachusetts state Senate unanimously approved legislation to require that seniors receive face to face counseling sessions before they enter into a reverse mortgage.
Sen. Susan Tucker (D-Andover) sponsored the legislation and told ItemLive “it was the wild west for many seniors,” adding she’d heard story after story of sad people selling annuities and convincing people to take on reverse mortgages at a huge commission.
Not all legislators approved of the requirement. Sen. Brian Joyce (D-Milton) said the state only has a few face to face counselors available for the 2,500 to 3,000 seniors a year who seek reverse mortgages.
Senate Minority Leader Richard Tisei told ItemLive the proposal is demeaning to seniors, who he said are capable of deciding for themselves whether to obtain reverse mortgages, without a mandatory face-to-face counseling session. “You’re assuming seniors are stupid,” Tisei said. “The state’s saying because you’re elderly you can’t make decisions. You have to have a mandatory session.”
Tisei proposed an amendment which would’ve taken out the face to face counseling requirement but was rejected by a vote of 33-4 by Democrats who countered that the measure is a consumer protection to help seniors with a process that is complicated even for some financial analysts they said.
However, the bill has changed a bit from its original form. Sen. Tucker spokesperson told RMD that “in person counseling will only be required for people below 50% of the area median income with less than $120,000 in assets beyond their primary residence.”
This causes problems for both seniors and lenders as there aren’t many physical counseling locations in the state. Lenders in the state can only use agencies which are approved by HUD and the Department of Elder Affairs said Jack Belles, President of Reverse Mortgages of New England.
“This is going to hurt business, 100% of our borrowers do counseling offer the phone because there are not many agencies that do face to face counseling in the state,” said Belles. The Massachusetts Department of Elder Affairs currently lists six approved counseling agencies on its website.
RMD asked the Senator whether or not she would help make sure there are enough counseling agencies in the state to meet demand and didn’t receive a response by press time.
The bill now moves to the House for further action, if signed into law, it will go into effect 18 months after the bill is signed.