WHILE THE HECM program is a creation of federal law, it is not immune from the influences of lawmakers in state capitals around the U.S. They frequently weigh in with changes that can affect reverse lenders, servicers, investors and borrowers. “There are as many as 80 bills around the country that relate to reverse mortgages in some way that are at least introduced or pending somewhere,” says James “Jay” Wright Jr., a partner at Birmingham, AL-based law firm Bradley. Sometimes, the influence of state law is positive. Earlier this year, for example, lawmakers in Massachusetts agreed to extend the use of phone and video counseling for reverse mortgage borrowers into March 2023. Other welcome changes include bills that exclude reverse mortgage proceeds from taxable income or from counting toward eligibility for public benefits. But the changes also can have negative consequences, potentially constraining access to credit for seniors, says James “Jim” Milano, a member at Weiner Brodsky Kider PC, a law firm in Washington, DC, that acts as outside general counsel for NRMLA. In some cases, lawmakers may be unaware of existing federal protections in the HECM program, Milano says. In others, they may be working from an outdated view of reverse mortgages and in response to isolated complaints. “We listen and we try to inform,” Milano says, noting that proposed state laws may sometimes conflict with federal laws. “We’re not opposed to protecting Tracking State Laws New York Co-Op Law, Other Rules Pass, As Experts Prepare for 2023 By Joel Berg James Wright Jr. James Milano 24 REVERSE MORTGAGE / NOVEMBER–DECEMBER 2022
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