NRMLA President Steve Irwin, who signed the letter, stated that whereas the commerce affiliation “totally helps seniors receiving counseling earlier than acquiring a reverse mortgage,” it opposes the invoice as presently drafted for a number of causes.
The group believes that proposed necessities for reverse mortgage counseling companies to be bodily situated within the state, and for his or her providers to be performed in particular person, will create a “extreme and pointless chilling impact on seniors’ capability to acquire a reverse mortgage in New Jersey.”
HousingWire‘s Reverse Mortgage Every day reached out to Turner’s workplace for additional data on the invoice however didn’t obtain a right away response.
NRMLA additionally opposes the invoice’s plan to create a seven-day recission interval after the closing of a House Fairness Conversion Mortgage (HECM). Irwin wrote that this rule would create “a useless and burdensome extension past the 3-day rescission interval already mandated for reverse mortgages below federal regulation.”
He went on to say that HECM is the “most prevalent reverse mortgage program” within the U.S. and New Jersey, and HUD guidelines already restrict how lenders obtain and course of functions previous to the borrower finishing the obligatory counseling requirement. Firms should present potential HECM debtors with an inventory of HUD-approved counseling companies.
The in-person counseling necessities included within the invoice additionally would run afoul of federal statutes.
“Pursuant to FHA’s necessities, HUD-approved nationwide intermediaries and HUD-approved companies that present reverse mortgage counseling providers over the cellphone should all the time be included on the checklist,” the letter defined.
NRMLA stated it seems that solely two counseling companies situated in New Jersey are HUD-approved suppliers right this moment. This violates HUD guidelines requiring at the very least 5 companies inside “the native space and/or state of the potential applicant.”
Moreover, the commerce group argued that seniors needs to be allowed to decide on whether or not to do the counseling in particular person or over the cellphone. The invoice would “deny customers’ selections and rights” and doubtlessly hurt these with a particular want, akin to a incapacity or language barrier.
“We firmly consider that SB 264, as presently drafted, could have the unintended consequence of lowering the provision of reverse mortgage counseling whereas concurrently imposing pointless hardships on New Jersey seniors searching for a reverse mortgage mortgage,” Irwin wrote. “This will doubtlessly end in seniors being denied access to credit and a vital financial ‘lifeline’ of their time of want.”
NRMLA lately took a stance on another piece of legislation in New Jersey involving mortgage compensation guidelines. It stated the invoice at hand, Senate Bill 4970, would misalign reverse mortgage buildings with a requirement that each one second-lien mortgages be repaid in “considerably equal” installments over equal intervals. Reverse mortgages enable seniors to transform their dwelling fairness into money with out making month-to-month funds.
