In comments submitted last week to the Consumer Financial Protection Bureau, the National Reverse Mortgage Lenders Association stresses the need for reverse mortgages to be completely exempt from new disclosure requirements mandated under the Dodd-Frank Act.
Reverse mortgages are largely exempt from the new forms, created under a process the CFPB coined “Know Before You Owe,” NRMLA explains, but there could be unwanted confusion and disruption brought by the use of the new disclosures with the forms reverse mortgage lenders currently use.
“There appears to be some confusion over a new group of disclosures created by Dodd-Frank – referred to as Affected Title XIV Disclosures – all of which do not explicitly exempt reverse mortgages,” NRMLA wrote to its members. “It’s our belief that requiring these disclosures with forms currently used by reverse mortgage lenders will cause un-wanted and unnecessary confusion and disruption. NRMLA requested the Bureau review its proposal and provide clarification and a longer implementation time line in order for it and the industry to better sort out these issues.”
The development of the new disclosures went through an in-depth process involving feedback from industry members and consumers as well as several rounds of market testing.
NRMLA plans to submit new disclosures to the Bureau shortly, the association’s executives write in the comments. The association told members in April it was working on drafting the new, reverse mortgage-specific documents.
Written by Elizabeth Ecker