Oregon Bill could threaten its own reverse mortgage activities

The bill ‘allows a lender that, in an inverted mortgage, offers a fixed amount in exchange for a claim on the equity of a property for claiming as equity and to receive as a proceeds in a sale of the property, No more than the percentage of the total equity in the property to which the flat -rate amount is the same on the date on which the lender provides the lump sum, ”according to the mention on the website of the state legislator.

The proposal was introduced by Senator Deb Patterson (D-Salem) and is partly sponsored by Senator Suzanne Weber (R-Tillamook). According to the legislative power of the State, the testimony has received from NRMLA, as well as a private individual in the state who believes that the measure can protect seniors against contracts for home spending.

Another letter from a private person opposes reverse mortgages because of “sickness [reverse mortgage] Commercials with corresponding testimonials as can be seen on television, “saying that they” do not convey the seriousness of the complex contract language. “

But the opposition of NRMLA against the bill is mainly due to the impact that it would have on the availability of its own reverse mortgages in the state.

“This is a very problematic piece of legislation because it relates to its own product loans,” Irwin told RMD. “Currently all own products, as at [Home Equity Conversion Mortgages (HECMs)]Enlarge 100% of the property. It is a non -re -admission -loan that depreciates negative and the balance increases over time. “

But to exclude a lender to admit 100% of the property, Irwin said that own products operate within the state.

Although it is unclear whether the intention of the account is to apply to both own loans and HECMs sponsored by the Federal Housing Administration (FHA), NRMLA has made it clear in his submitted remarks that the existing HECM statute in federal law would replace any legislation at state level and allow the HECM activities.

But own products must work based on the laws within the states they have, and the same cannot be said of these alternatives to private label HECM.

“What we have suggested is no different than the state of Washington – allows the continuous obstacle of 100% of the property, even if you lend yourself to a part of that property,” Irwin said about the comments of the association. “Over time, that balance increases, and if that balance would rise with a rate that was different from the rating percentage of the property, then you will be covered how much you would realize at the time of sale or transfer of real estate. That is simply not feasible. “

RMD reached Patterson’s office for comment, but did not receive an immediate answer. Although it is difficult to attribute an intention to the account, Irwin said it could have been formed in response to other stock-based products such as Home Equity investments.

The letter from one voter to support the bill would keep that in itself and describe how a customer had a contract with equity with Unison In 2017 “had to sell her house to move to a senior living community.”

By 2024: “Her house was appreciated at $ 425,000. After the sale, she had to repay unison not only the $ 40,000, but also 65.75% of the rating of the house – in total almost $ 137,000, “said the letter. “Instead of using this equity to finance its care, she applies Medicaid to cover her expenses, which shifts the financial burden to Oregon’s taxpayers.”

Unison is also involved in a lawsuit in the state of Washington, in which the claimants claim that the company’s product is effectively an inverted mortgage without supervising regulatory supervision, that the company denies.

The same voter recently also submitted information to the legislative power over the Consumer Financial Protection Bureau (CFPB) The issue of short and consumer bulletins with regard to their own power contracts. This was one of the final guidelines that the agency issued under former director Rohit Chopra.

NRMLA continues to look for involvement with its members in the state of Oregon, as well as the legislators who want to take the bill, Irwin said.

“We have offered to train the legislators and sponsors of this bill,” said Irwin. “But I would say that we are prepared for the first half of the year and have anticipated more legislation at state level compared to the reverse mortgage category. And here we are. “