Reverse Mortgage Guide

The state of Massachusetts has launched a reverse mortgage site, www.mass.gov/reversemortgage.

“Reverse mortgages are extremely complicated products and consumers, beyond the required counseling, should make every effort to obtain independent legal and financial advice when considering one,” said Daniel C. Crane, Undersecretary of Consumer Affairs and Business Regulation. “It is important to appreciate the costs associated with these loans and that, over time, the loan will deplete the accumulated equity in your home.”

To help consumers, the Massachusetts site has information outlining what prospective borrowers need to know and a list of approved lenders and programs.

The site also has information for lenders. For instance, the list of required protections for Massachusetts borrowers includes:

___Mandatory participation in a reverse mortgage counseling session approved by the Commonwealth’s Executive Office of Elder Affairs (List of Approved Counseling Services). Verify receipt of the counseling certificate from each borrower.

___Seven day “cooling off” period following a consumer’s acceptance of a commitment, during which a consumer cannot be required to close or proceed with the loan transaction.

___Required plain language disclosures of specific mortgage loans terms.

___No prepayment penalties or restrictions permitted.

___Disclosure requirement and acknowledgment of contingencies which could force a sale of the property securing the loan.

___Inclusion of a disclosure statement that a reverse mortgage loan has estate and tax planning consequences and may affect eligibility for government benefits and that applicants are advised to seek appropriate advice.

The Massachusetts site includes a lot of information which should interest reverse mortgage borrowers generally and not just state residents. It’s a good resource, and it’s a concept which other states should adopt. Stop by and take a look.

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This entry was posted on Monday, August 18th, 2008 at 3:31 am and is filed under Uncategorized . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.