Reverse Mortgage Counseling Bill Passes in Calif.

A bill passed through the California state Senate last week will require all reverse mortgage counseling within the state to be conducted in person, unless a borrower opts out of the face-to-face counseling option in favor of a telephone session. 

The bill, passed by California lawmakers and awaiting a signature by Governor Jerry Brown, specifies that reverse mortgage counseling, under state law, must be conducted in person unless the borrower elects to receive the counseling in another manner.

Upon receiving the bill, if no action is taken, the bill automatically becomes law. Gov. Brown has the option to sign or veto the bill through 12 days following receipt. The bill was presented on August 31 and would become effective once passed into law on January 1, 2013. 

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Written by Elizabeth Ecker

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  • ” must be conducted in person unless the borrower elects to receive the counseling in another manner.”

    Am I missing something here??? It sounds like this new law will do nothing (a good thing) as the borrower elects what they want to do …would picking up the phone and calling one of the national phone counseling agencies meet the requirement of electing not to do a face to face session?

  • Seems like more bureaucratic burden to me.  The law requires that the “certifcation” state that the client has elected to receive  counseling in a manner other than face to face. Current language on HUD certificates does not include that. To me(not an attorney), it looks like another mandatory piece of paper is necessary unless HUD amends its current certificate.

    The legislation also reaffirms prohibition on the well intended but practically problematic ban on lender funding for counseling.

  • The federally designed and insured reverse mortgage program is one of the most secure and safest ways to ensure financial security during retirement.  So why is it that politians seem so intent on making it as cumbersome as possible to obtain?  How many layers bureaucracy is enough? 
    Why aren’t our appointed political figures trying to solve our real problems: over spending, unsustainable social programs, run-away debt, over promised and unfunded government pensions???

    • Byron,

      Because that is what they do.  

      Don’t expect your supervisor to be able to perform brain surgery.  

      The California legislative branch is doing exactly what we pay them to do.  It has been that way since the fall of 1850.  In fact it was much worse back then.

  • In agree 100% with Byron Pyle, I agree with his entire comment. Our industry is being targeted because it is related to the senior population. This is what is politically right right now.

    Protect the poor senior from themselves, big government will come in and save them, big government needs to protect their savings and retirement from the big bad wolf. The problem with that is the big bad wolf just may be the big government in this go around!

    This is getting worse and it is not going to get any better for our industry unless we step up to the plate big time. We need to be heard more often. I am glad to see NRMLA becoming more involved and taking a stronger stance. We need to become even stronger and represent our seniors in the true spirit of what they represent to our society and to our country.

    John A. Smaldone

  • Chrish is absolutely right, seniors do have the option to either have a face to face or a phone interview. Not only is it a waste of tax payers money but we need to ask our self’s why? Why would something as foolish as this bill even be created.

    Is this just another attack on the reverse mortgage industry and a political scheme just to bring more attention to a senior to make them think how bad the reverse mortgage may be? Sure makes you wonder!

    John A. Smaldone

  • Since this is just California legislation and will not do much other than make it so some counselors will have to do something to make sure that the prospect knows they the right to face-to-face counseling, I have wasted far too much time on this subject already and — I originate in California.

  • Another crazy twist: Recent CA app had a disclosure waiving the right to face-to-face counseling that they had to sign, even though they HAD face-to-face counseling!  Just gotta love it …

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