The Massachusetts Division of Banks has published new reverse mortgage policies that take effect October 14. Following a September hearing on reverse mortgages including input from the National Reverse Mortgage Lenders Association and industry representatives, the Division reconsidered policy surrounding counseling procedures and an “opt-in” mandate in Massachusetts.
Under the proposed rule, borrowers could revoke an “opt-in” either in writing or verbally. This, MetLife Assistant Vice President Joe DeMarkey said on behalf of NRMLA at the hearing, could be problematic because it would be hard to prove an opt-out that was not in writing, especially after the borrower has gone to closing and has executed loan documents. Under the state’s amendment to the policy, borrowers can now opt-out only in writing.
Another change to the state policy was a clarification that when a borrower opts out, he or she is entitled to reimbursement of fees that were paid directly to the mortgagee (not fees paid to third parties, as previously written).
Finally, the Division of Banks reversed an item concerning face-to-face counseling. Originally, if a mortgagee determined that a borrower didn’t have to complete the opt-in form or face-to-face counseling, the mortgagee would have to provide documentation attesting that the client qualified as a mortgagor. That requirement was removed from the final regulation, a point which NRMLA noted in the September hearing.
View the final policies.
Written by Elizabeth Ecker