NRMLA Executive Vice President Steve Irwin submitted letters on behalf of the association to lawmakers in Philadelphia and Connecticut this week in response to legislation introduced in both jurisdictions that could adversely impact reverse mortgage companies and borrowers.
CT Senate Bill 150 would require financial institutions to inform prospective reverse mortgage clients of their right to be counseled, provide clients with a list of five counseling agencies approved by the Department of Housing and Urban Development, and retain a copy of the counseling certificate signed by the client (or client’s representative) and the counselor attesting that the client was counseled in-person or over the phone. SB 150 would also prohibit a financial institution from paying for the counseling session. In his letter to the Aging Committee, Irwin explained that the provisions of SB 150 are already mandated under the Federal Housing Administration’s Home Equity Conversion Mortgage program.
Earlier today, a separate bill was introduced in the Connecticut legislature that would require borrowers to meet either in-person for application or to complete face-to-face counseling. NRMLA will respond to this legislation after careful review of the bill language.
In Philadelphia, Council Member Cherelle Parker introduced Philadelphia Bill 180138 to prevent reverse mortgage foreclosures when a homeowner is in a payment agreement for real estate taxes on their homes. While NRMLA fully supports consumer protections for seniors, Irwin commented that FHA prohibits borrowers from participating in tax deferral programs that permit a lien to be recorded against the property, unless it is subordinated to both the first and second liens in a HECM transaction. “As currently drafted, we are concerned that Philadelphia Bill 180138 will inadvertently place Philadelphia seniors with current FHA-insured HECM loans or other reverse mortgages at greater risk, while not affording them the benefits we believe you intend,” said Irwin.
Irwin said the association is willing to work with city council members and explore other mechanisms that can help area seniors with reverse mortgages who are having problems paying their taxes on a timely basis.
Read both letters by logging into NRMLAonline.org and accessing the NRMLA Comment Letters section.