A new bill introduced in the Texas House of Representatives would have a big impact on the way reverse mortgages are offered in the Lone Star State, if passed.
Authored by Rep. Borris Miles, HB 2410 would require that lenders offer heirs of reverse mortgage borrowers a period of at least 15 years to repay the loans.
From the time of death, lenders must offer the repayment terms and provide interest rates that do not to exceed exceed the average rate of interest charged on reverse mortgage loans. Heirs of borrowers would have 90 days to accept once the offer is provided.
“We’re against it. We believe it’s bad public policy and its bad for the seniors in the state of Texas,” said Scott Norman, president of the Texas Mortgage Bankers Association during during an interview with RMD. “This is my number one priority in the state legislature.”
The bill could have a big impact on the way reverse mortgages are offered in the state and would likely force lenders to pull out of the state due to the terms according to our sources. Earlier this year, Texas overtook Florida and became the second largest state in terms of HECM volume.
RMD contacted Rep. Miles several times seeking comment by both email and phone, but his press secretary has yet to respond to our requests for comment. Early Tuesday morning, an intern for Miles said the Rep. was “no looking to push the legislation.”
A similar bill was proposed in Missouri last year, but never went into effect.
View a copy of the bill here.