The proposed legislation allows lenders of reverse mortgages to claim equity relative to the lump sum provided, seeking to protect seniors. Supported by Sen. Deb Patterson and co-sponsored by Sen. Suzanne Weber, it faces opposition from the National Reverse Mortgage Lenders Association (NRMLA) due to potential restrictions on proprietary loans. Testimonies reveal mixed sentiments: while some advocate for senior protection, critics highlight concerns over misleading advertisements and complex contracts. NRMLA warns of detrimental effects on proprietary products, as current laws enable lenders to encumber 100% of property value in nonrecourse loans.
This bill introduces significant changes to reverse mortgage regulations, aiming to protect seniors but raising concerns about proprietary products' availability and lenders' operational limitations.
Irwin emphasized the potential negative impact of this legislation, stating that preventing lenders from encumbering 100% of a property's equity would jeopardize proprietary loans in the state.
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