A proposed bill that would create more protections for reverse mortgage borrowers in Illinois appears to have stalled in the state legislature following a Senate passage just weeks ago.
The Reverse Mortgage Act, or SB1281, passed through the Illinois Senate April 29, having undergone three readings before its arrival in the state’s House of Representatives that same day.
But now after four weeks, there has been little action taken for the bill, which would, among other provisions, institute a three-day cooling-off period before a borrower can be bound by the reverse mortgage loan terms and establish certain protections for borrowers.
Specifically, the Reverse Mortgage Act amends the Illinois Act on the Aging, providing the state’s Department on Aging the power and duty to develop the content and format of a statement regarding non-recourse reverse mortgage loans.
This statement, according to the legislation, will provide independent consumer information regarding the potential benefits and risks associated with non-recourse reverse mortgages, as well as potential alternatives to these types of loans.
It would also provide consumers with the availability of independent counseling services, including those services provided by nonprofit agencies certified by the federal government to provide counseling for government-insured Home Equity Conversion Mortgages.
In a similar vein, the Reverse Mortgage Act also amends the state’s Attorney General Act, requiring the Office of the Attorney General shall develop documents regarding reverse mortgage loans for the purpose of consumer education. In conjunction with this amendment, the bill states that only the Attorney General may enforce violations of the Act.
But while state lawmakers intend for the Reverse Mortgage Act to help senior homeowners in Illinois, the bill has come to a standstill just days before the House is slated to adjourn May 31.
Since its arrival in the House, the Reverse Mortgage Act (as of this writing) has been subject to a first reading and a subsequent referral to the Illinois General Assembly Rules Committee.
On May 4, the legislation added Rep. La Shawn K. Ford (D) as an alternate chief co-sponsor to the bill, which was filed by Sen. Jacqueline Collins (D) in February.
Written by Jason Oliva