New legislation introduced by Colorado state lawmakers last week aims to suspend a borrower’s obligation to repay a reverse mortgage in the event that a natural disaster renders the property uninhabitable as a principal residence.
Under current law, the reverse mortgage borrower is relieved of the obligation to occupy the subject property as a principal residence if the borrower is temporarily absent for up to 60 days or, if the property is adequately secured, up to one year.
House Bill 17-1026 adds a third exception to the principal residence requirement to cover situations in which a natural disaster or other serious incident beyond the borrower’s control renders the property uninhabitable. Under these circumstances, the maximum time allowable for a temporary absence is five years.
“The general assembly hereby finds, determines, and declares that this act is necessary for the immediate preservation of the public peace, health, and safety,” states the bill sponsored by State Representative Jonathan Singer (D) and State Senator Matt Jones (D).
Both Rep. Singer and Sen. Jones are listed as members of the Wildfire Matters Review Committee, which is charged with reviewing and proposing legislation or other policy changes related to wildfire prevention, mitigation and related matters, including public safety and forest health issues.
Continuing a growth trend seen much of the past year, Colorado was among the hottest markets for endorsement growth in 2016. Growth in the state was driven by Denver, which saw a 33.6% increase in endorsement volume from the previous year to 1,998 loans.
View HB 17-1026 here.
Written by Jason Oliva