A bill introduced in California prohibits all insurers, brokers, agents and others engaged in the transaction of insurance, from participating in, being associated with, or employing any party that participates in or is associated with, the origination of a reverse mortgage.
The bill, AB 793, introduced by Assemblymember Mike Eng (D-Calif.) in February, also prohibits insurers, brokers, agents and others from referring a client or prospective client to any party that participates in or is associated with the origination of a reverse mortgage. However, brokers can still offer customary insurance that is normal under a reverse mortgage loan, the bill specifies.
HUD already has protections in place that prevent reverse mortgage lenders from also selling insurance to reverse mortgage borrowers. The California bill would go a step further to prevent insurance agents from also making reverse mortgage recommendations or being involved in the origination process.
AB 793 may be heard in committee on March 20, according to California bill documents.
View the full text of the bill.
Written by Elizabeth Ecker