Connecticut Amends Reverse Mortgage Provisions
Connecticut has modified its provisions regarding reverse mortgages in an effort to increase protections for consumers. These changes are effective as of October 1, 2018.
A new section has been added which prohibits any state or federally chartered bank or credit union from accepting a final application for a reverse mortgage or assessing any fees for such mortgage until it has informed the prospective applicant of the requirement to attend reverse mortgage counseling. The lender must also provide the applicant with a list of independent housing counseling agencies approved by the Department of Housing and Urban Development.
The lender must receive a certification, signed by both the applicant and the counseling agency, confirming that the applicant has actually received counseling in person or by telephone from an approved independent housing counseling agency. The certification must include the date of the counseling session, and the name, address, and telephone number of both the applicant and the counselor.
Counseling agencies are prohibited from receiving any compensation, whether directly or indirectly, from the lender.
Any violation of these provisions constitutes an unfair or deceptive trade practice.
For the full text of Senate Bill 150, please refer to https://www.cga.ct.gov/2018/ACT/pa/2018PA-00038-R00SB-00150-PA.htm
Elizabeth Dailey, JD, is a Regulatory Compliance Director with CLA. She is a graduate of the University of New Hampshire and earned her juris doctor at New England Law. She is admitted to the Massachusetts Bar.
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