NRMLA President Steve Irwin testified this week before the Senate Finance Committee in the Maryland General Assembly in favor of a reverse mortgage bill that would help expand reverse mortgage product options in Maryland.
Right now, Maryland homeowners can only apply for the FHA Home Equity Conversation Mortgage, despite a growing market for non-FHA reverse mortgages in other parts of the country.
Such private-label reverse mortgages are allowed in Maryland under The Maryland Reverse Mortgage Loan Act of 2010, as long as they comply with FHA’s reverse mortgage regulations. Due to the structural differences between HECMs and private-label reverse mortgages, no company currently offers the latter in Maryland.
Senate Bill 457 would clarify these issues by not requiring private, non-FHA-insured reverse mortgages to comply with every FHA HECM program guideline.
“The bill retains critical consumer protections, such as counseling, a required financial assessment to ensure the loan is a viable long-term solution and limits on offering other financial services products with a reverse mortgage, such as annuities,” Irwin noted in his oral testimony. “Senate Bill 457 will open new opportunities for businesses to offer private reverse mortgages to senior citizens, while strengthening consumer protections.”
NRMLA will continue to work with Maryland lawmakers to educate them about reverse mortgages and respond to questions they have with the bill.