California Governor Passes Reverse Mortgage “Cooling Off” Bill

California Governor Jerry Brown last week signed a bill into law that will add new protections for reverse mortgage borrowers in the state. 

The legislation, known among industry members as AB 1700 or California’s “cooling off” bill, was introduced and sponsored by Assemblyman Jose Medina (D-CA) and will take effect January 1, 2015. The bill requires that a new reverse mortgage worksheet be presented to and signed by all borrowers during the counseling process and a “cooling off” period of seven days after counseling before a lender can accept a loan application or assess any fees. 

Under the new law, the worksheet includes a list of items that the borrower is advised to consider and discuss during the counseling process. Either the lender or the counseling agency must provide the worksheet guide to the borrower, depending on whether the borrower contacts the lender prior to counseling. The borrower must receive the worksheet before the counseling session takes place. 


The worksheet must be signed by both the borrower and counselor and returned to the lender with the counseling certificate, the language specifies. 

The bill resembles a past bill that was introduced by Assemblyman Medina in 2013, but was later removed from further consideration upon finding that certain requirements would unnecessarily burden the lending process. The new bill moved swiftly through the state legislature; it passed through the California Assembly on April 21 by an 11-1 vote, and passed in the state Senate in August by a vote of 35-0. 

View the bill

Written by Elizabeth Ecker

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  • This ruling is a clear indication that this Governor
    doesn’t believe his senior constituents possess the brainpower to make clear concise decisions.
    For those that are in urgent need this can be a serious

  • None of these people could possibly be familiar with the fact that seniors may cool off on the process right up until 3 days post closing. It simply bogs down the process for getting loans registered and helping those people who seriously need our help.

    To me, this is our legislators simply banging this empty drum again. They use our product to gain political quarter with voters under the guise of “saving” our seniors–a wildly popular goal to which few are truly committed. If they really want to do that, they could start by finding the funds seniors lost in all the cuts these same politicians made to their programs. Those cuts are why many seniors are now asking me for help in getting a reverse mortgage.

    I have a theory about why these knuckleheads continue to steal television and newspaper spotlights by hammering the reverse mortgage industry. They don’t actually want to do anything–they simply want to look busy so voters will recognize their names and maybe their faces when they go to the voting booth.

    When you think about it, we really don’t do all that many reverses on a national level so if they screw our program up, it really won’t affect all that many seniors on a practical level. And, if it does affect them it won’t affect them for long because seniors, in their eyes, may simply be a dying demographic and therefore, a disappearing vote.

    “Why are we surprised when politicians play politics? It’s not like they are supposed to be real adults . . . they are, after all, politicians and don’t have real jobs and aren’t playing around with their money.” …Anon.

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