Connecticut lawmakers have been busy this week as a recent bill adds a few requirements for Home Equity Conversion Mortgage lenders.
"The state senate on Tuesday unanimously passed S.B. 150, which would prevent lenders from accepting applications for Home Equity Conversion Mortgages unless they clearly explained the pre-loan counseling requirements, provided a list of Department of Housing and Urban Development-approved counselors, and received a signed form attesting that the counseling process had been completed," according to Reverse Mortgage Daily.
Should lenders choose not to follow-suit with the law, there are some serious consequences involved. The report states that lenders could receive a cease and desist from the Connecticut consumer protection commissioner, seek restitution or have penalties upwards of $5,000 imposed.
"Martin Looney, president pro tempore of the state senate, told the Associated Press that he’s received multiple reports of 'reverse mortgage lenders preying on seniors in Connecticut,'" according to the report.
With the bill, there could be a bit of relief for seniors who are looking into reverse mortgages. Having them understand the product clearly should make a huge difference on how borrowers make their final decisions on HECMs.
To learn more about the new Connecticut HECM bill, click on the image above.