NRMLA responded to a changing law in Massachusetts that would include new opt-in procedures for seniors seeking reverse mortgages as well as mandatory face-to-face counseling for those who fall below a set income threshold.
The Division is seeking public feedback on the provisions as well as general input on availability of reverse mortgage counseling, firsthand experiences of counseling sessions and the level of reverse mortgage foreclosure in the state. The formal comments from NRMLA, submitted to the Massachusetts Division of Banks included a request for changes to the loan origination documentation process.
“With regard to the opt-in requirements, we request that the Division allow seniors to express their desire to obtain a reverse mortgage through currently utilized loan forms or documents,” the NRMLA comments say. “For instance, the Division may specify that by signing a formal loan application for a reverse mortgage, a senior expressly opts in and requests the reverse mortgage transaction.” Further, NRMLA said if that request is not feasible, the association requests the Division create a model form that lenders and originators may use in order to document a senior’s desire to opt in and choose a reverse mortgage.
While the Division of Banks has postponed the face-to-face counseling requirement until 2012, NRMLA said the current availability of face-to-face counseling is “inadequate at best,” and that 95% of counseling is done over the phone currently. NRMLA also pointed to recent steps the Federal Housing Administration has taken with the aim of improving counseling.
See the full NRMLA comments.
Written by Elizabeth Ecker