The sponsor of a reverse mortgage bill in California that would mandate new requirements for prospective borrowers pre-counseling this week pulled the bill from the legislative approval process.
According to the National Reverse Mortgage Lenders Association, California Assembly Member Jose Medina, sponsor of A.B. 553, removed the bill from further consideration upon meeting with NRMLA’s legislative team.
The bill as originally written would have required lenders to provide a suitability checklist as well as a new disclosure to California borrowers seven days prior to obtaining reverse mortgage counseling.
“In a meeting with Assembly Member Medina, NRMLA explained that, while its members agree with the sponsors’ goal of consumer protection for seniors, in many instances, a prospective reverse mortgage applicant attends a counseling session prior to speaking with a lender,” NRMLA wrote in a notice to members. “The bill also would have required a disclosure stating in 16-point type that a reverse mortgage is a complex financial instrument that may or may not be suitable for the person’s immediate and future needs. However, as NRMLA pointed out, a similar disclosure currently is required by California law.”
Written by Elizabeth Ecker