The implementation of a rule in Massachusetts that would require face-to-face reverse mortgage counseling for low income borrowers has been delayed until 2016.
As the result of an emergency bill issued by the state legislature before adjourning yesterday, the legislation containing the requirement has been delayed for another two years.
Passed into law in 2010, an amendment to a bill included the mandatory provision for certain low income seniors. Since then, the industry has worked toward postponing the mandate—succeeding in that effort twice; in 2010 and in 2012.
The rule was scheduled to take effect on August 1.
Massachusetts reverse mortgage stakeholders have rallied for a delay of the rule in hopes to overturn it eventually. The bill, which requires face to face counseling for low-income reverse mortgage prospective borrowers, presents challenges for those who lack transportation or accessible reverse mortgage counselors within a reasonable proximity in Massachusetts, those in the industry have said in defense of postponing the rule.
The delay does not take effect until Massachusetts Governor Deval Patrick signs it into law, however.
“Until the Governor signs the bill, the delay will not be effective, therefore there may be a “gap” in the delay for up to 10 days in early August,” the National Reverse Mortgage Lender Association wrote to members in an alert Thursday. “Lenders should take this “gap” into consideration for any counseling sessions that occur on or after August 1 and until the bill becomes effective.”
Written by Elizabeth Ecker