Reverse mortgage borrowers in Utah may face changes to the counseling process beginning May 12, under recently passed state legislation, S.B. 120.
The Utah Reverse Mortgage Act requires that before a prospective borrower signs a reverse mortgage application the prospective borrower “shall meet with an independent housing counselor,” as part of the process.
The new Utah legislation also requires that lenders and borrowers observe a seven-day cooling off period beginning May 12.
After a prospective borrower accepts, in writing, a lender’s written commitment to make a reverse mortgage loan, the lender may not bind the prospective borrower to the reverse mortgage earlier than seven days after the day on which the prospective borrower gives the written acceptance to the lender.
The legislation’s cooling off period requirement resembles somewhat that which California signed into law last year, which also included a “cooling off” bill.
The California law requires that a 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.
Read the enrolled copy of S.B. 120 here.
Written by Cassandra Dowell