Most states allow remote notarization, and the U.S. Congress is looking to create a uniform standard, Wright says. However, the option is not available in some southeastern states. Nonetheless, Wright says he expects continuing efforts to foster the use of remote tools for reverse mortgages. “States are going to try to find ways to accommodate borrowers who want to go through the application and closing process remotely,” he says. Foreclosure Protection States often see a role for themselves in protecting borrowers, which can translate into proposals affecting the default and foreclosure process, Wright says. In 2020, for example, New York legislators passed a bill that provides more and earlier disclosures ahead of a foreclosure, he says. The District of Columbia, meanwhile, enacted legislation to enlarge a program that HECM borrowers can use to avoid default. Under the new law, adopted in June, seniors can qualify for aid of up to $40,000. The money can go toward property taxes and insurance but also toward fees for condominiums and homeowners associations. Florida considered adding servicing requirements to HECMs along the lines of what the federal Consumer Financial Protection Bureau has imposed on forward mortgages, Wright says. They include sending periodic statements, establishing a single point of contact for borrowers and establishing loss mitigation procedures. That bill did not pass in the most recent legislative session. Moves to shield borrowers facing default are likely to continue, particularly as COVID-era protections fade away, Wright says. “I think we will continue to see states take steps to act on that.” The Private Sector Many states already allow sales of private-label reverse mortgages, a fast-growing segment of the industry. But as the market evolves, the laws may need occasional tweaks. Maryland and Tennessee are among the states where reverse lenders have been seeking changes, Milano says. Maryland law, for example, requires private-label mortgages to comply with the requirements of the federal HECM program. That includes limits on loan size, a barrier for the jumbo loans that make up the private-label market. Tracking State Laws continued from page 25 26 REVERSE MORTGAGE / NOVEMBER–DECEMBER 2022
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