§1104. Reverse mortgage lender; duties to elders
A. In addition to any other obligation under law, any reverse mortgage lender who offers, sells, or arranges the sale of a reverse mortgage to an elder, shall provide the elder with a notice that the elder should discuss the items outlined in this Section with a loan counselor. For the purposes of this Section, "elder" means any person sixty years of age or older.
B. The reverse mortgage counselor shall discuss the following items with a prospective reverse mortgage borrower:
(1) How unexpected medical or other events causing the borrower to move out of the borrower's home earlier than anticipated will impact the total annual cost of the reverse mortgage loan.
(2) The extent to which the borrower's financial needs would be better met by options other than a reverse mortgage loan, including less costly home equity lines of credit, property tax deferral programs, or governmental aid programs.
(3) Whether the borrower intends to use the proceeds of the reverse mortgage loan to purchase an annuity or other financial or insurance product and the consequences of doing so.
(4) The effect of repayment of the reverse mortgage loan on other residents of the domicile that is securing the reverse mortgage loan after all borrowers are deceased or permanently abandon the domicile.
(5) The borrower's ability to finance routine or catastrophic home repairs, especially if the maintenance is a factor that may determine when the reverse mortgage loan becomes payable.
(6) The impact that the reverse mortgage loan may have on the borrower's tax obligations and eligibility for government assistance programs, and the effect that losing equity in the domicile securing the reverse mortgage loan will have on the borrower's estate and heirs.
(7) The ability of the borrower to refinance alternative living accommodations, such as assisted living or long-term care, after the borrower's equity is depleted.
C. If the prospective reverse mortgage borrower meets with a loan counselor prior to meeting with or discussing a reverse mortgage loan with a lender, the loan counselor shall review the items discussed in Subsection B of this Section with the prospective reverse mortgage borrower and also meet the notice requirement in Subsection A of this Section.
Acts 2010, No. 418, §1.
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