The author of a new reverse mortgage bill in California cancelled a public hearing and removed his bill from further consideration after he met with NRMLA’s legislative team and was informed that the legislation, as originally drafted, posed serious administrative challenges.
The bill authored by California Assembly Member Jose Medina (A.B. 553) would have required lenders to provide a new disclosure and “suitability” checklist to clients seven (7) days prior to counseling.
On April 29, the bill was going to be discussed before the Banking and Finance Committee, but Assembly Member Medina requested that the bill be pulled from consideration.
In a meeting with Assembly Member Medina, NRMLA explained that, while its members agree with the sponsors’ goal of consumer protection for seniors, in many instances, a prospective reverse mortgage applicant attends a counseling session prior to speaking with a lender. The bill also would have required a disclosure stating in 16-point type that a reverse mortgage is a complex financial instrument that may or may not be suitable for the person’s immediate and future needs. However, as NRMLA pointed out, a similar disclosure currently is required by California law.
Among items required by law to be discussed are:
- What happens to others living in the same home after you die or move out?
- Do you know that you can default on a reverse mortgage?
- Have you fully explored other options?
- Are you intending to use the reverse mortgage to purchase a financial product?
- What is the impact of reverse mortgages on your eligibility for government assistance programs?
The bill was subsequently amended to address some of these concerns, but then Assembly Member Medina agreed to pull the bill from consideration until further notice.
Many of us in the industry feel there are so many important questions that must be addressed before you receive a Reverse Mortgage. Contacting a certified expert such as myself is your first step.
The NMRLA (National Reverse Mortgage Lenders Association) meets in May to discuss these and other important topics. I’ll make sure to keep you informed.
Contact me today to discuss the laws, financial benefits and overall merits of a Reverse Mortgage here in California for you or a family member.
SUSAN DRAWDY, Your Reverse Mortgage Expert
All California Mortgage
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