Texas Bill Allows 15 Year Repayment Period for Heirs of Reverse Mortgage Borrowers

A new bill introduced in the Texas House of Representatives would have a big impact on the way reverse mortgages are offered in the Lone Star State, if passed.

Authored by Rep. Borris Miles, HB 2410 would require that lenders offer heirs of reverse mortgage borrowers a period of at least 15 years to repay the loans.

From the time of death, lenders must offer the repayment terms and provide interest rates that do not to exceed exceed the average rate of interest charged on reverse mortgage loans. Heirs of borrowers would have 90 days to accept once the offer is provided.


“We’re against it. We believe it’s bad public policy and its bad for the seniors in the state of Texas,” said Scott Norman, president of the Texas Mortgage Bankers Association during during an interview with RMD. “This is my number one priority in the state legislature.”

The bill could have a big impact on the way reverse mortgages are offered in the state and would likely force lenders to pull out of the state due to the terms according to our sources.  Earlier this year, Texas overtook Florida and became the second largest state in terms of HECM volume.

RMD contacted Rep. Miles several times seeking comment by both email and phone, but his press secretary has yet to respond to our requests for comment. Early Tuesday morning, an intern for Miles said the Rep. was “no looking to push the legislation.”

A similar bill was proposed in Missouri last year, but never went into effect.

View a copy of the bill here.

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  • This is sadly the norm in politics. Bills are rushed to be introduced in a reactionary manner that have unintended consequences, simply because the politician is more concerned about grabbing headlines than actually introducing solid and well thought out legislation.

    • jstults,

      It seems you do not get the point. Those mortgages should not only be for 100 years but they should be interest free but allowing interest deductions for what should have been paid. That would be a much better program.

  • Forget about lenders. Lenders cannot guarantee that they will exist at the time heirs might inherit a home.

    The issue is if HUD will insure such a debt, knowing it will have to carry a home for 15 years, if the lender no longer exists or if the loan is already in assignment with HUD at the time of death. Constitutionally this bill is a state placing a demand on a department of the federal government. I am no attorney but something does not smell quite right about this bill.

    This bill would terminate the HECM program as it now exists in Texas, period. It is doubtful if Congress will change the HECM program just to suit the demands of the Republic of Texas. Talking about independent….

  • I feel this bill would be a big mistake, if passed. An investor who invests in reverse mortgages are not the normal investor. They invest based on actuary tables and returns over a certain period of time. This bill will upset the equation in such a way that Texas may be eliminated off the map by the investment community.

    In short, this could be the demise of the reverse mortgage in Texas. I hope other states don’t follow in the path of the Texas House of Representatives. This is my opinion but I don’t feel I am to far off tract!

    John A. Smaldone

  • I honestly don’t understand the political rush to “fix” reverse mortgages. If I die with 5 years into a 30 fixed forward loan; nobody cares about my heirs being able to refinance that loan and inherit my home. Nobody is clamoring about a forward mortgage being forclosed on when I die and my heirs can’t unload the property!

  • On second thought why does’t the bank just buy the heirs a brand new home?
    This is totally rediculous!
    Reverse Guy: What makes you believe this is unintended consequences? Miles couldn’t be that ignorant. It could be this is his way of trying to end RM in Texas period!

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