While legislation passed by Massachusetts’ state House of Representatives and Senate would delay major reverse mortgage counseling changes in Massachusetts until 2016, a delay in the bill’s signing into law by Gov. Deval Patrick in essence implements the rule until the legislation is finally passed.
The legislation was passed by the state’s legislative houses in late July to delay a face-to-face counseling rule that will apply to certain borrowers meeting a low income threshold. While it was anticipated to be signed into law by Gov. Patrick, the governor instead returned the bill to the legislature with an amendment; putting the rule into effect.
The National Reverse Mortgage Lenders Association noted the change in correspondence to members late Wednesday, pointing to the language in the amendment that is awaiting a reading by the state’s House and Senate: “for any reverse mortgage loan that closes prior to August 1, 2016, a written certification received by the mortgagee from a third-party organization reflecting that the mortgagor has received telephonic counseling relative to the appropriateness of the loan transaction shall be sufficient if the third party organization has been approved by the executive office of elder affairs for the purpose of such counseling or by the federal Department of Housing and Urban Development for the purpose of mortgage counseling.”
The face-to-face requirement is in effect until the amendment is adopted, NRMLA explained.
Massachusetts’ legislature is currently in informal session, meaning it can address non-controversial issues; under which the amendment is included.
Reverse mortgage advocates in the state have long worked against passage of the face-to-face requirement, citing challenges having to do with borrowers traveling to in-person counseling sessions and a lack of available counseling agencies within proximity to certain regions in the state.
Written by Elizabeth Ecker