Utah Governor Spencer Cox signed legislation (HB 94) into law that lowers the minimum borrower age for proprietary reverse mortgage borrowers from 62 to 55 and changes the current seven-day cooling-off period to a five-day cooling-off period.
HB 94 will go into effect on May 3, 2023.
Currently, after a prospective borrower accepts a lender’s written commitment to make a reverse mortgage, the lender may not bind the prospective borrower to the reverse mortgage earlier than seven days after the day on which the prospective borrower gives the written acceptance to the lender. During the seven-day period, the lender may not require the prospective borrower to close or otherwise proceed with the reverse mortgage. However, pursuant to HB 94, the referenced seven-day cooling-off period will be changed to a five-day cooling-off period. Moreover, HB 94 clarifies that if the borrower is deceased, the servicer is not required to send a notice of default and wait 30 days to allow the borrower to cure the default before initiating a foreclosure action.
The new law also clarifies that for HECMs, prospective borrowers must receive counseling before an FHA case number is assigned to the loan, and for proprietary reverse mortgages, prospective borrowers must receive counseling before signing a reverse mortgage application.