Calif. Reverse Mortgage Bill Amended, No Longer Requires In-Person Counseling

A California assembly bill that previously made a push for mandatory face-to-face reverse mortgage counseling throughout the state has been amended to make the face-to-face stipulation optional for all people attending the counseling.

The bill, introduced in March by Assembly member Susan Bonilla (D-Calif.), follows Department of Housing and Urban Development guidelines, but previously went a step further to require that reverse mortgage counseling is conducted in person.

The bill was amended April 23 to remove the face-to-face requirement.

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“This bill would require the prospective borrower to receive that reverse mortgage counseling in person, unless the borrower elects to receive the counseling in another manner,” the bill now states.

A law with a similar requirement has been passed in Massachusetts to require some reverse mortgage borrowers to receive in-person counseling. Scheduled to go into effect in August, lenders and counseling agencies have spoken against the change, arguing that it will cause additional stress on borrowers, a majority of whom prefer phone counseling.

The California legislation is scheduled for a committee hearing on April 30.

View the amended bill.

Written by Elizabeth Ecker

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  • Massachusetts Division of Banks could care less about the stress on borrowers.  A recent auditor when asked what will people do on Nantucket and Marthas Vineyard stated: “if you can afford to live on the islands you don’t need a reverse mortgage”.  Unfortunate these are the type of people influencing borrower’s livelihoods.

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