The New York State Assembly now considering a bill that would raise the minimum borrower age for a reverse mortgage customer from 60 to 62.
Reverse Mortgage Daily reported that State Assembly Bill A5877 would also make additional changes to the state’s reverse mortgage laws including provisions for reverse mortgages and cooperative apartments, defining the role of a non-borrowing spouse, allowing for partial or full prepayments, and changing the product’s language from “mortgagors” or “applicants” to “borrowers.” The bill would also restrict fees from being charged for reverse mortgage processing until the borrower receives a counseling certificate.
One of the bill’s provisions also stated that the “processing of a reverse mortgage shall include the ordering of an appraisal, a title search and a credit report or an FHA case number, when applicable. A reverse mortgage loan cannot be processed, nor shall a borrower incur any processing expense until the borrower completes the required counseling. The processing of a reverse mortgage loan may only proceed once the counseling is complete, as evidenced by the signed and dated counseling certificate.”
The bill would further clarify that a borrower “shall not be required by an authorized lender or broker to purchase an insurance or annuity product,” except when insurance is required in a reverse mortgage transaction. It would also repeal section 280-A of the state’s real property law that mandated lenders originate as many reverse mortgages to borrowers 70 years and older as it makes for those who are 60 years and older.
Bill A5877 is currently being considered by the Assembly’s Committee on Banks.
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