A New Hampshire bill amending loan officer compensation for reverse mortgages has garnered criticism for its vagueness.
House Bill 594 amends the state’s general consumer laws, striking out a phrase that prohibits yield spread premiums on reverse mortgage transactions.
“In a reverse mortgage transaction, any credit derived from offering an interest rate higher than the par rate shall only be paid to the borrower or used to pay the borrower’s costs, and shall not be used as an additional source of compensation,” the bill states on page nine.
Sponsored by Rep. Mary Beth Walz (D) of Merrimack, the bill fails to verify what exactly the “par rate” might be.
“This proposed provision is problematic,” says Jim Milano of Weiner, Brodsky, Kider, who also serves as counsel to the National Reverse Mortgage Lenders Association (NRMLA), in an email to members.
According to NRMLA, HB 594 is one of several hundred bills right now being considered by the New Hampshire legislature before the legislature adjourns on June 28, 2013.
Written by Jason Oliva