October 22, 2020
Print This PagePrint This Page

  *
Session:
Bill #:
Session:
Chamber: View Search Tips
Search Term:
Year: View Search Tips
Search Term:
       Florida Senate - 2010                                    SB 1532
       
       
       
       By Senator Fasano
       
       
       
       
       11-01364A-10                                          20101532__
    1                        A bill to be entitled                      
    2         An act relating to reverse mortgage loans to senior
    3         individuals; providing purposes; providing
    4         definitions; providing for application to certain
    5         reverse mortgage loans; specifying requirements for
    6         reverse mortgage loans; specifying authorized fees and
    7         charges for reverse mortgage loans; requiring lenders
    8         to provide borrowers certain loan information;
    9         providing additional lender requirements; specifying a
   10         statute of limitations for collection of loan
   11         proceeds; prohibiting lenders from requiring reverse
   12         mortgage loan applicants to purchase certain financial
   13         products; specifying prohibited reverse mortgage
   14         lender or broker activities; providing counseling and
   15         consumer education requirements for reverse mortgage
   16         lenders; specifying a reverse mortgage loan as a lien;
   17         specifying priority of the lien; providing
   18         construction; providing for treble damages under
   19         certain circumstances; providing for nonapplication of
   20         certain state laws and rules to reverse mortgage
   21         loans; providing an effective date.
   22  
   23  Be It Enacted by the Legislature of the State of Florida:
   24  
   25         Section 1. (1) PURPOSES.—The purposes of this section are
   26  to:
   27         (a) Meet the special needs of senior homeowners by reducing
   28  the effect of the economic hardship caused by the increasing
   29  costs of meeting health, housing, and subsistence needs at a
   30  time of reduced income, through the issuance of reverse mortgage
   31  loans to permit the conversion of a portion of accumulated home
   32  equity into liquid assets.
   33         (b) Encourage and increase the involvement of mortgagees
   34  and participants in the mortgage markets in the making and
   35  servicing of reverse mortgage loans for senior homeowners.
   36         (c) Protect senior homeowners from abuse and fraud.
   37         (d) Encourage the use by senior homeowners interested in
   38  reverse mortgage loans of entities approved by the United States
   39  Department of Housing and Urban Development for participation in
   40  the Federal Housing Administration’s Home Equity Conversion
   41  Mortgage Program and any alternative proprietary products.
   42         (2) DEFINITIONS.—For purposes of this section, the term:
   43         (a) “Broker” means an entity the activity of which in the
   44  reverse mortgage loan process is limited to taking applications,
   45  discussing terms and rates with the borrower, and undertaking
   46  similar activities, but is not identified on the promissory note
   47  as the payee and does not maintain its own funds for making
   48  reverse mortgage loans.
   49         (b) “Business day” means a day on which the offices of a
   50  lender are open to the public for carrying on substantially all
   51  of the lender’s business functions.
   52         (c) “Department” means the United States Department of
   53  Housing and Urban Development.
   54         (d) “Eligible borrower” means any individual who is at
   55  least 62 years of age. A borrower who is incapacitated and
   56  otherwise considered an eligible borrower is eligible for a
   57  reverse mortgage loan if there is an individual who can contract
   58  for the borrower as a court-appointed guardian or who possesses
   59  a durable power of attorney for the borrower. If there is a co
   60  borrower on the loan, the co-borrower must also be at least 62
   61  years of age to be deemed an eligible borrower.
   62         (e) “Lender” means an entity that is identified on the
   63  promissory note as the payee, that maintains its own funds,
   64  including warehouse lines, for making reverse mortgage loans,
   65  and that may or may not be approved by the department to
   66  participate in making reverse mortgage loans under the program.
   67         (f) “Make a reverse mortgage loan” means the funding and
   68  closing of a reverse mortgage loan subject to this section.
   69         (g) “Maximum claim” means the maximum amount of proceeds
   70  over the life of the reverse mortgage loan the borrower is
   71  entitled to receive under the note.
   72         (h) “Originate a reverse mortgage loan” means the taking of
   73  an application for a reverse mortgage loan subject to this
   74  section.
   75         (i) “Program” means the Home Equity Conversion Mortgage
   76  Program of the Federal Housing Administration.
   77         (j) “Reverse mortgage loan” means a nonrecourse loan
   78  secured by real property that meets the following criteria:
   79         1. The loan provides a lump sum, periodic cash advances,
   80  and lines of credit to a borrower based on the equity or the
   81  value in a borrower’s owner-occupied principal residence.
   82         2. The loan requires no payment of principal or interest
   83  until the entire loan becomes due and payable.
   84         (k) “Taking an application” means the submission of a
   85  written application for a reverse mortgage loan by the borrower
   86  or borrower’s representative to the lender, and the borrower or
   87  borrower’s representative intends the application to be
   88  considered for approval. The taking of a borrower’s contact
   89  information, property address, and similar information or
   90  obtaining the borrower’s credit report is not deemed taking an
   91  application.
   92         (3) COVERAGE.—This section applies to reverse mortgage
   93  loans originated by or made to eligible borrowers on the
   94  borrower’s principal, one-to-four family residential dwelling
   95  and not originated or made under the program, as well as reverse
   96  mortgage loans originated or made under the program.
   97         (4) LIMITATIONS AND PARAMETERS.—A reverse mortgage loan
   98  must comply with all of the following:
   99         (a) Any prepayment, in whole or in part, shall be permitted
  100  without penalty at any time during the term of the reverse
  101  mortgage loan. For purposes of this section, a penalty does not
  102  include any fees, payments, or other charges that would have
  103  otherwise been due upon the reverse mortgage loan being due and
  104  payable.
  105         (b) A reverse mortgage loan may provide for a fixed or
  106  adjustable interest rate or combination of such rates,
  107  including, but not limited to, compound interest, and may also
  108  provide for interest that is contingent upon the value of the
  109  property upon execution of the loan or at the loan’s maturity,
  110  or on changes in value between the dates of the loan’s closing
  111  and maturity.
  112         (c) If a reverse mortgage loan provides for periodic
  113  advances to a borrower, the advances may not be reduced in
  114  amount or number based upon any adjustment in the interest rate.
  115         (d) The reverse mortgage loan shall become due and payable
  116  upon the occurrence of any of the following events:
  117         1. The home securing the loan is sold or title to the home
  118  is otherwise transferred;
  119         2. All borrowers cease occupying the home as a principal
  120  residence, except as provided in paragraph (e);
  121         3. Any fixed maturity date agreed to by the lender and the
  122  borrower occurs; or
  123         4. An event occurs that is specified in the loan documents
  124  and that jeopardizes the lender’s security.
  125         (e) Repayment of the reverse mortgage loan is subject to
  126  the following additional conditions:
  127         1. Temporary absences from the home not exceeding 60
  128  consecutive days may not cause the mortgage loan to become due
  129  and payable.
  130         2. Extended absences from the home exceeding 60 consecutive
  131  days, but less than 1 year, may not cause the mortgage loan to
  132  become due and payable if the borrower has taken prior action
  133  that secures and protects the home in a manner satisfactory to
  134  the lender, as specified in the loan documents.
  135         (f) This section does not require a lender to make a
  136  reverse mortgage loan if the lender has reason to believe the
  137  borrower, acting on his own or acting through the borrower’s
  138  guardian or an individual with a durable power of attorney for
  139  the borrower, is unable to enter into a contract for any reason,
  140  including, but not limited to, incapacity or duress. This
  141  paragraph does not create any special legal duty for the lender
  142  to determine the borrower’s ability to enter into a contract.
  143         (5) FEES AND CHARGES.—
  144         (a) A reverse mortgage loan may include costs and fees that
  145  are charged by the lender or the lender’s designee, originator,
  146  or servicer, including, but not limited to, costs and fees
  147  charged upon execution of the loan, upon execution of
  148  appreciation on a periodic basis, or upon maturity. The borrower
  149  may also be responsible for any costs of failing to comply with
  150  the reverse mortgage loan contract.
  151         (b) All fees are subject to all applicable state and
  152  federal standards.
  153         (6) AGREEMENT AND NOTE; DISCLOSURES.—
  154         (a) A lender shall provide the borrower, anytime during the
  155  reverse mortgage loan process but before the loan closing, with
  156  a document disclosing in plain language a summary of the core
  157  terms and conditions of the loan. The core terms and conditions
  158  must include:
  159         1. Interest rate.
  160         2. Whether the rate is fixed or adjustable.
  161         3. If the rate is adjustable, the frequency of the rate
  162  change and the maximum amount the rate can change in any period.
  163         4. The public index to which any changes in the interest
  164  rate will be tied.
  165         5. The term of the loan.
  166         6. The schedule of payment paid out during the term of the
  167  loan.
  168         7. The conditions under which repayment is triggered.
  169         (b) Lenders that meet Federal Housing Authority
  170  requirements for disclosure are also deemed to meet the
  171  requirements of this subsection.
  172         (c) The lender must comply with applicable federal
  173  regulations.
  174         (d) The lender’s right to collect reverse mortgage loan
  175  proceeds is subject to the applicable statute of limitations for
  176  written loan contracts. Notwithstanding any other provision of
  177  law, the statute of limitations shall commence on the date the
  178  reverse mortgage loan becomes due and payable as provided in the
  179  loan agreement.
  180         (7) CROSS-SELLING.—
  181         (a) A lender may not require an applicant for a reverse
  182  mortgage loan to purchase an insurance annuity or other similar
  183  financial product, excluding title insurance or hazard, flood,
  184  or other peril insurance, as a condition of obtaining a reverse
  185  mortgage loan. A reverse mortgage lender or a broker arranging a
  186  reverse mortgage loan may not:
  187         1. Offer an insurance, annuity, or other similar financial
  188  product, excluding title insurance or hazard, flood, or other
  189  peril insurance, to the borrower prior to the closing of the
  190  reverse mortgage loan or before the expiration of the right of
  191  the borrower to rescind the reverse mortgage loan agreement.
  192         2. Refer the borrower to anyone for the purchase of an
  193  insurance, annuity, or other similar financial product,
  194  excluding title insurance or hazard, flood, or other peril
  195  insurance, prior to the closing of the reverse mortgage loan or
  196  before the expiration of the right of the borrower to rescind
  197  the reverse mortgage loan agreement.
  198         (b) A mortgage originator or any other party that
  199  participates in the origination of a reverse mortgage loan must
  200  comply with all applicable state laws and rules and federal laws
  201  and regulations.
  202         (8) COUNSELING AND CONSUMER EDUCATION.—
  203         (a) Prior to making a reverse mortgage loan, a lender
  204  shall:
  205         1. Refer the prospective borrower to a housing counseling
  206  agency approved by the department.
  207         2. Provide the borrower with a list of at least five
  208  counseling agencies approved by the department, including at
  209  least two agencies that can provide counseling by telephone.
  210         (b) A lender may not accept a final and complete
  211  application for a reverse mortgage loan from a prospective
  212  applicant or assess and collect any fees from a prospective
  213  applicant without first receiving a certification from the
  214  applicant or the applicant’s authorized representative that the
  215  applicant has received counseling from an approved agency. The
  216  certification shall be signed by the borrower and the agency
  217  counselor and shall include the dates of the counseling and the
  218  names, addresses, and telephone numbers of the counselor and the
  219  borrower. An electronic facsimile copy of the housing counseling
  220  certification satisfies the requirements of this paragraph. The
  221  lender shall maintain the certification in an accurate,
  222  reproducible, and accessible format for the term of the reverse
  223  mortgage loan.
  224         (c) Counseling may be face to face or by telephone.
  225         (d) The information covered in the counseling session shall
  226  include:
  227         1. Options other than a reverse mortgage loan that are
  228  available to the homeowner, including other housing, social
  229  service, health, and financial options.
  230         2. Other reverse mortgage loan options that are or may
  231  become available to the homeowner, including, but not limited
  232  to, sale-leaseback financing, deferred payment loans, and
  233  property tax deferrals.
  234         3. The financial implications of entering into a reverse
  235  mortgage loan.
  236         4. A disclosure that a reverse mortgage loan may have tax
  237  consequences, affect eligibility for assistance under federal
  238  and state programs, and have an impact on the estate and heirs
  239  of the homeowner.
  240         (e) For borrowers represented by an individual who is a
  241  court-appointed guardian or possesses a durable power of
  242  attorney for the borrower, such individual must complete the
  243  counseling requirements.
  244         (f) Upon the request of the borrower, other parties shall
  245  be permitted to attend the counseling with the borrower. This
  246  paragraph does not create an obligation or duty on the part of
  247  the lender to inform, notify, or advise any other party of the
  248  opportunity to attend the counseling.
  249         (g) The borrower may be assessed a fee for the counseling.
  250  The fee may be financed under the loan amount as limited by the
  251  department.
  252         (9) OTHER PROVISIONS.—
  253         (a) A reverse mortgage loan constitutes a lien against the
  254  subject property to the extent of all advances made pursuant to
  255  the reverse mortgage loan and all interest accrued on such
  256  advances, and that lien shall have priority over any lien filed
  257  or recorded after a reverse mortgage is recorded.
  258         (b) For purposes of this section, a property is deemed to
  259  be owner-occupied notwithstanding that legal title to the
  260  property is held in the name of a trust provided the occupant of
  261  the property is a beneficiary of the trust.
  262         (c) An arrangement, transfer, or lien subject to this
  263  section may not be invalidated solely because of the failure of
  264  a lender to comply with any provision of this section. However,
  265  this section does preclude the application of any other existing
  266  civil remedies provided by law.
  267         (d) A lender who fails to make loan advances as required in
  268  the reverse mortgage loan documents and fails to cure an actual
  269  default after notice as specified in the reverse mortgage loan
  270  documents shall forfeit to the borrower treble the amount
  271  wrongfully withheld plus interest at the legal rate.
  272         (e) Any state law or rule that applies to loans, extensions
  273  of credit, or other similar financial instruments; that applies
  274  limitations, restrictions, or prohibitions against certain
  275  financial concepts, including, but not limited to, shared equity
  276  lending, collateral-based lending, negative amortization,
  277  adjustable-rate interest, deferred interest, and payments
  278  calculated on an interest-only basis, however defined; or that
  279  frustrates the purpose of reverse mortgage loans does not apply
  280  to reverse mortgage loans.
  281         Section 2. This act shall take effect July 1, 2010.

Site Map
Session:   Bills ·   Calendars ·   Bound Journals ·   Citator ·   Search ·   Appropriations ·   Redistricting ·   Bill Information Reports
Committee Publications
Historical Information
Statutes:   Introduction ·   View Statutes ·   Search Statutes
Flsenate.gov
Disclaimer: The information on this system is unverified. The journals or printed bills of the respective chambers should be consulted for official purposes.    Copyright © 2000-2020 State of Florida.     Privacy Statement     Contact Us     Get Acrobat Reader