California reverse mortgage borrowers may be required to obtain HECM counseling in person if a new bill becomes law.
Introduced by Assemblymember Susan Bonilla (D-CA), AB 2010 follows the Department of Housing and Urban Development’s guidelines but goes one step further and requires the prospective borrower meet with a counselor face-to-face.
“A lender shall not accept a final and complete application for a reverse mortgage loan from a prospective applicant or assess any fees upon a prospective applicant without first receiving a certification from the applicant or the applicant’s authorized representative that the applicant has received counseling in person from an agency,” says the bill.
The bill comes at the request of the California Senior Legislature, a nonpartisan senior organization, a spokesperson for Bonilla told RMD.
“It was one of their top 10 proposals and they came and requested the assemblywoman to support their effort,” said Luis Quinonez, Bonilla’s spokesperson.
Massachusetts passed a similar law that requires certain reverse mortgage borrowers to obtain face to face counseling in 2010. The state has run into problems due to the lack of availability of reverse mortgage counselors to perform face to face sessions. But as far as California encountering similar problems, it’s not expected to be an issue, according to Quinonez.
“We have done some preliminary inquiries and don’t see any concerns about the lack of resources to conduct [these counseling sessions] in person,” he says.
The bill may be heard in committee on March 25.