As more consumers opt for private-label reverse loans in the years ahead, states could become more aggressive in regulating them, Shahin says. “It wouldn’t surprise me.” Property Taxes States offer various programs designed to defer or assist in the payment of property taxes for older borrowers, many of whom have HECMs. Legislatures often revise those programs, making them another area of legislation for the reverse mortgage industry to track. State legislation typically helps seniors pay their property taxes or grants them deferrals, which would seem to help HECM borrowers. Massachusetts lawmakers have been debating legislation that would allow more seniors to qualify for property tax deferrals by shortening residency requirements. Under existing law, people must have lived in the state for ten years to qualify. The proposed legislation would shorten residency to five years. However, bills occasionally have the opposite effect. A bill introduced in New Jersey, for example, would bar reverse mortgage borrowers from taking advantage of property tax deferrals available to lower-income seniors. Getting Ready Most legislatures begin their work in January. Milano and Shahin say they begin preparing in November and December, researching what bills might surface and what issues need to be addressed. State lawmakers typically end their legislative sessions in June. Because state lawmakers often are reacting to what they hear from constituents, it can be difficult to predict what legislation will gain traction, the two attorneys say. Another complicating factor is the potential for bills covering forward mortgages to spill over to reverse mortgages. State laws on mortgage lending often apply to both, Milano says. Further muddying predictions is that many bills will sit idle for extended periods. But when they start moving, they move quickly, Milano says. “Once they get legs, you don’t have a lot of time,” Milano says. “The problem with that, even to this day, is that state legislators, in our experience, may not always be fully aware of what reverse mortgages are, how they work, that the federal program is in place, what its features are and all the consumer protections that are included in the federal program.” REVERSE MORTGAGE / NOVEMBER–DECEMBER 2022 27
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