Louisiana Office of Financial Institutions Orientation to the
- Slides: 91
Louisiana Office of Financial Institutions Orientation to the Louisiana Secure and Fair Enforcement of Mortgage Licensing Act of 2009 Or Louisiana S. A. F. E. Residential Mortgage Lending Act Updated 08 -10
SAFE Residential Mortgage Lending Act l LSA-R. S. 6: 1081 through 6: 1099 l Enacted effective July 31, 2009 l Provides for licensure of mortgage originators, brokers, and lenders l Amended effective August 15, 2010
Residential Mortgage Lending Act l Subdivided into three parts – PART I. GENERAL PROVISIONS l l l – PART II. LICENSURE, REGISTRATION, & CERTIFICATION l l l – Licensure Requirements Applications Recordkeeping – OFI Rule RML 01 -01 Examination and Investigation of Complaints Suspension and Revocation of Licenses and Registrations PART III. RESIDENTIAL MORTGAGE LOANS l l l – Definitions Prohibitions Promulgation of Rules Fees and Charges Mortgage Loan Origination Agreements Criminal Penalties Part IV. Reverse Mortgage Loans l l Requirements Counseling Commitment and cooling off period Duties to elders
Residential Mortgage Lending Act l Who must be licensed – Originators l – – – (including contract processors and underwriters) Brokers Lenders Wholesale Lenders l which are not otherwise exempt
Definitions l “Mortgage Loan Originator” means an individual who for compensation or gain or with the expectation of compensation or gain takes a residential mortgage loan application or offers or negotiates terms of a residential mortgage loan.
Definitions l Mortgage Broker or Residential Mortgage Broker – any person who, directly or indirectly, for compensation or expectation of compensation, negotiates, places, or finds, or offers to negotiate, place or find a residential mortgage loan for another person – includes FHA loan correspondents and lenders who table fund loans
Definitions l Mortgage Lender or Residential Mortgage Lender – any person who, directly or indirectly, originates or makes, or offers to originate or make, a residential mortgage loan for another person
Definitions l Residential Mortgage Lending Activity – any activity, including electronic activity, engaged in for compensation or with the expectation of compensation in connection with a residential loan transaction including origination or funding, negotiation or placement, or offering to negotiate, place or fund a residential mortgage loan for a person
Definitions l Residential Mortgage Loan – Any loan primarily for personal, family, or household use that is secured by a mortgage, deed of trust, or other equivalent consensual security interest on a dwelling as defined in Reg Z or residential immovable property upon which is constructed or intended to be constructed a dwelling as defined in Reg Z
Residential Mortgage Loan l Now covers all loans secured by a persons dwelling including: – – Mobile home loans without a security interest in the land Motor homes used as the person’s dwelling Boats if used as the person’s dwelling Vacant land if to be used to construct or move a person’s residence on it
Definitions l Registered Mortgage Loan Originator – An individual who meets the definition of a mortgage loan originator and is an employee of a depository institution or a subsidiary that is either owned and controlled by a depository institution and regulated by a federal banking agency or an institution regulated by the Farm Credit Administration and is registered with, and maintains a unique identifier through, the Nationwide Mortgage Licensing System & registry.
R. S. 6: 1084 l No person, directly or indirectly, shall engage in a residential mortgage lending activity without complying with the Louisiana S. A. F. E. Residential Mortgage Lending Act or rules and regulations promulgated pursuant to thereof
R. S. 6: 1086 l Beginning July 31, 2009, unless otherwise exempt, no person shall engage in residential mortgage lending activity without first obtaining and maintaining annually: – – A license and registration as a mortgage loan originator, or a license as a mortgage lender or broker A unique identifier in the NMLS&R
R. S. 6: 1086 l The following persons shall have until July 31, 2010 to obtain a license in compliance with the Act: – – A person whose activities were not subject to the licensing provisions of this Act on July 30, 2009 A person engaged in residential mortgage lending activities which was subject to an exemption provided by this Chapter on July 30, 2009
Originator Exemptions • • • Registered mortgage loan originators, when acting for a depository institution An individual who offers or negotiates terms of a residential mortgage loan with or on behalf of an immediate family member A licensed attorney who negotiates the terms of a residential mortgage loan on behalf of a client as an ancillary matter to the representation of the client unless the attorney is compensated by a lender, a mortgage broker, or other mortgage originator including any agents of such
Originator Exemptions l l Any individual who performs only real estate brokerage activities and is licensed provided they are not compensated by a lender, mortgage broker, or other mortgage originator or any of their agents Any individual engaged solely in extensions of credit involving timeshares Individuals who are employees of a retailer of manufactured or modular homes performing only clerical duties which receive no compensation or gain from a mortgage broker or lender An individual who offers or negotiates terms of a mortgage loan secured by a dwelling that is owned by and serves as the individual’s residence
Originator Exemptions Loan Processor or Underwriter l l An individual engaging solely in loan processor or underwriting activities, who does not represent to the public, through advertising or other means including the use of business cards, stationary, brochures, signs, rate lists, or other promotional items, that such individual can or sill perform any of the activities of a mortgage originator. Defined as a person who performs clerical or support duties as an employee at the direction of and subject to the supervision of a person license or exempt from the Act.
Originator Exemptions Loan Processor or Underwriter l Clerical or Support Duties include subsequent to receipt of an application: – – Receipt, collection, distribution, and analysis or information common for the processing or underwriting of a residential mortgage loan Communicating with a consumer to obtain the information necessary for the processing or underwriting of a loan, to the extent that such communication does not include offering or negotiating loan rates or terms, or counseling consumers about residential loan rates or terms
Originator Exemptions Loan Processor or Underwriter l DO NOT APPLY TO: – Independent contractor loan processors or underwriters – They must obtain an originator license and a unique identifier issued by the NMLS&R
Mortgage Broker/Lender Exemptions l Depository Institutions or direct or indirect subsidiaries including their employees – – Exempt from licensure Still subject to requirement of Part III
Direct & Indirect Subsidiaries Depository Institutions l Proposed definitions: l Direct Subsidiary - any firm, corporation, association, trust, or legal entity which is 100 percent owned by a bank, savings and loan association, or credit union. l Indirect Subsidiary - any firm, corporation, association, trust, or legal entity which is 100 percent owned by a direct subsidiary as defined above, and any firm, corporation, association, trust, legal entity, partnership, or limited liability company which is 100 percent owned by a bank, savings and loan association, or credit union, and one or more direct subsidiaries as defined above.
Mortgage Broker/Lender Exemptions l l Mortgagees which are the former owner of the dwelling or residential immovable property Insurance company or agent which holds a current producer license and brokers loans exclusively to an insurer – Both still subject to Part III of Act
Mortgage Broker/Lender Exemptions l – – – Licensed Attorneys When activity is incidental to providing legal services Exempt from licensure Still subject to Part III
Mortgage Broker/Lender Exemptions l Any not for profit 501(c) corporation making loans to promote home ownership or improvements for the disadvantaged – – Exempt from licensure Still subject to Part III
Mortgage Broker/Lender Exemptions l Any Real Estate Investment Trust l Small Business investment Companies licensed by SBA – Both Still subject to Part III
Requirements for Licensing l l Fingerprints and fee for background check Personal history and experience submitted through the NMLS&R Authorization and fee for obtaining a credit report Information required for owners, members, or partners – For corporation each 10% or greater shareholder
Requirements for Licensing l l Demonstrate financial responsibility, character, and general fitness to warrant a determination that the applicant will operate honestly, fairly and efficiently within the purposes of this Chapter. Complete 20 hours of pre-licensing education approved by NMLS&R also a minimum of each of the following – – – l l 3 hours of federal law and regulations 3 hours of ethics including fraud, consumer protection, and fair lending 2 hours of training relating to non-traditional mortgage marketplace Pass a written examination with both national and state components Obtain and maintain a surety bond – Originators may be covered by a Surety Bond obtained by their employer
Restrictions on granting Licenses l l Paid all fees due to OFI Never had a mortgage related license revoked in any governmental jurisdiction Never convicted, pled guilty, or nolo contendere to a felony involving fraud, dishonesty, breach of trust, or money laundering Not convicted, pled guilty, or nolo contendere to any felony within the last seven years
Surety Bond / Deposit l Each applicant for licensure must provide one of the following in amount which determined by loan volume: – Surety Bond based upon loan volume from the previous year: l $0 to $99, 999 bond amount of $25, 000 l $100, 000 or greater bond amount of $50, 000 l – Employer may obtain coverage for employees Pledged deposit in federally insured institution located in Louisiana in the amount of Surety Bond otherwise required – * For initial license bond or deposit must be at least $25, 000
Nationwide Mortgage Licensing System and Registry (NMLSR) l l Effective June 18, 2007 Act 36 of the 2007 legislature authorized the Office of Financial Institution’s participation in a nationwide online licensing system. The licensing system collects application data from individuals and companies and submit it to each jurisdiction (state) where they are licensed or applying for a license.
Nationwide Mortgage Licensing System and Registry (NMLSR) l Office of Financial Institutions began utilizing the system on August 1, 2008. l Beginning August 1, 2008, all application filings and notifications with OFI were required to be made through the licensing system.
Nationwide Mortgage Licensing System and Registry (NMLSR) l l All persons utilizing the nationwide licensing system shall be required to pay user fees in addition to any applicable license, renewal, notification, or late fees. The Commissioner may share any information disclosed to the system with any state or federal regulatory agencies having authority over residential mortgage lending activities
Application Fees l Mortgage Broker, Lender – – l Each Branch (other than main office) Renewal Fee $300 Originators – Renewal Fee $400 $100
RENEWALS l Renewals in the NMLS&R begin November 1 st each year. Licensees must attest to the accuracy of their records. l Late after December 31 st and before March 1 st – – l Broker/Lender late fee $200 Originator late fee $50 Licenses Expire January 1 unless all requirements satisfied before March 1
Requirements for Renewal Must continue to meet all requirements for obtaining a license l Must satisfy the continuing educational requirements l Must be in compliance with all uncontested orders or consent agreements including payment of fees, penalties, or refunds NOTE failing to meet requirements will result in license expiring on December 31 l
LSA-R. S. 6: 1089 l l No residential mortgage lender or originator may conduct lending activities under any name other than in their current record on the NMLS&R Commissioner must be notified prior to changes in name or location and pay $100 fee Must notify Commissioner of office closure within 30 days A late notification results in an additional $100 late fee
LSA-R. S. 6: 1089 B. l Whenever employment of an originator changes, Commissioner must be notified within 30 days – – Employer and Employee must give notification through NMLS&R Employee must pay $50 transfer fee to change sponsorship of their license to another broker or lender Failure to notify within 30 days results in a $100 late notification fee per occurrence Upon leaving employment remove relationship and sponsorship through NMLS&R
R. S. 6: 1090 l l l No license may be sold or transferred No person shall acquire control (51%) of licensee without obtaining prior written approval of OFI after submitting an application and $300 fee Failure to obtain approval constitutes operating without a license and subjects the acquirer to the associated penalties
R. S. 6: 1090 l A mortgage broker can only broker loans to a mortgage lender – Brokering to a Broker is prohibited
R. S. 6: 1090 l Licensees may only engage in residential mortgage lending through natural persons licensed as a mortgage broker, mortgage lender, or originator, or who are exempt from Part II
NET BRANCHING l Prohibited by LSA-R. S. 6: 1090 G. – l Except as provided by Rule OFI in process of drafting rule & currently allowing : – – – net compensation of branch employees only all contracts, leases, & accounts must be in name of licensed employer indemnification agreements not permissible
Restrictions on Employment after denial or revocation l No person who has been denied a license or had a license revoked whether they failed to request an administrative hearing or the decision was affirmed in an administrative hearing, may be employed as a processor of mortgage loans or hold a position responsible for the operation of the principal place of business or any branch
R. S. 6: 1090 (I) l No person licensed pursuant to the Residential Mortgage Lending Act, R. S. 6: 1081 et seq. , shall engage in or be financially compensated for any loan transaction in which such person, for a fee, commission, or other valuable consideration, is acting as a licensee under the Louisiana Real Estate License Law, R. S. 37: 1430 et seq. , in connection with the same residential loan transaction.
RECORD RETENTION l Requirements set forth by Rule and Policy – See http: //www. ofi. louisiana. gov
EXAMINATIONS FEES l l Fee not to exceed $400 per location visited Due within 30 days of assessment Late fee of up to $50 per day not paid timely Other expenses may apply where records must be reviewed at an out-of-state location.
Suspension & Revocation of License l After an opportunity to be heard in Administrative hearing, Commissioner may revoke or suspend license of person who: – – Violates any of the provisions of this Chapter or any Rule or Regulation promulgated, or any order, including but not limited to a cease and desist order or subpoena Violates any provision of a voluntary consent agreement Has knowingly provided or caused to be provided false or fraudulent information or financial statements or withheld information which would have resulted in denial of license Refuses to permit examination of books and records or fails to furnish required information
Suspension & Revocation – – – Fails to maintain records required after given written notice Continues in office any individual with power to direct management or policies of a licensee upon conviction of any felony Violates any provision of a regulatory or prohibitory statute and has been found to have violated such by the governmental agency responsible for determining such Misrepresents or conceals material facts or makes false promises to influence an applicant or mortgagor Knowingly engages in any transaction, practice, or course of business which perpetrates a fraud upon any person in connection with the making, purchasing, sale or brokering of any mortgage loan.
Suspension & Revocation – – – – Misrepresents or conceals material facts terms, conditions, etc. of a transaction to which he is a party, pertinent to an applicant or mortgagor Failure to account for or deliver personal property which has come into their hands which is not their property or which they are not entitled to retain Fails to disburse without cause any funds in accordance with any agreements with a residential mortgage loan Fails to pay any fee or assessment imposed by the Chapter or Rule Violates written restriction or conditions of license Fails, after notice without lawful excuse, to obey any order or subpoena issued by the Commissioner discovers any fact or condition that currently exists which if it had existed at the time of the original application, would have warranted denial of the application
Reapplication upon revocation l A person whose license has been revoked for any reason may not reapply for a license until at least five years have elapsed from the date of the order of revocation, unless the commissioner, in his sole discretion, prescribes an earlier or later date
Immediate Suspension l The Commissioner may order an immediate suspension of the license of any person who: – – – Fails to maintain bond or pledged deposit Commits serious violations of the Act such that, in the opinion of the Commissioner, the public safety and welfare demand emergency action Submits a check covering the fee for any application, notification, examination, late fee, or penalty which is returned by the licensee’s depository institution
Immediate Suspension – – Is convicted of a felony which would have prohibited issuance or renewal of the license Has license suspended or revoked in another jurisdiction
Appeal of Immediate Suspension l l A person for whom a license has been suspended shall have thirty days from the date of the order to request a hearing in accordance with the Administrative Procedure Act Failure to timely request a hearing shall constitute a waiver of appeal rights regarding the suspension
Fines & Penalties l Upon being found guilty of violating any provision of the RMLA or Rule brokers, and/or originators may be fined: – – – Up to $1, 000 per violation & Up to $1, 000 per day the person acts as a residential mortgage broker, lender, or originator without complying with the RMLA or any rules promulgated thereunder Refunds may also be ordered for any unauthorized fee or charge
Prohibitions l It shall be a violation for any person engaged in residential mortgage lending activity subject to this Chapter to: – – – Directly or indirectly employ any scheme, device, or artifice to defraud or mislead borrowers, lenders, or any person, when such person or individual knew or should have known that such was defrauding or misleading Engage in any unfair or deceptive practice toward any person Obtain property by fraud or misrepresentation
Prohibitions – – With intent to defraud, solicit or enter into a contract with a consumer providing for payment of an unlawful fee or commission to a person subject to this Chapter even though no loan is actually obtained for the consumer Solicit, advertise, or enter into a contract for specific interest rates, points, or other terms when the person or individual knew or should have known that such terms are not actually available at the time of soliciting, advertising, or contracting.
Prohibitions – – – Conduct any business covered by this Chapter without holding a license or knowingly assist or aid and abet any person in the conduct of business under this Chapter without a valid license as required As determined by the commissioner, structure a residential loan transaction in such a manner as to circumvent the provisions of this Chapter Fail to comply with this Chapter or rules or regulations promulgated under it, or fail to comply with any other state or federal law, including rules and regulations issued thereunder, applicable to any residential mortgage lending activity
Prohibitions – – Make in any manner, any false or deceptive statement or representation with regard to the rates, points, or terms or conditions for a residential mortgage loan when such person or individual knew or should have known that such was false or deceptive, or engage in bait and switch advertising Negligently make any false statement, or knowingly and willfully make any omission of material fact, in connection with any information or reports filed with a governmental agency or the NMLS&R, or in connection with any investigation conducted by the commissioner or any other governmental agency
Prohibitions – – – Make any payment, threat, or promise, directly, to any person or appraiser of a property for the purpose of influencing the independent judgment of the person in connection with a residential mortgage loan, or influencing the independent judgment of the appraiser with respect to the value of the property Collect, charge, or attempt to collect or charge, or use or propose any agreement purporting to collect or charge any fee prohibited by this Chapter Engage in loan processing or underwriting activities as an independent contractor without obtaining a license to act as a residential mortgage loan originator
Prohibitions – – Fail to truthfully account for monies belonging to a party to a residential mortgage loan transaction Represent to the public through advertising or other means of communicating or providing information including the use of business cards, stationary, brochures, signs, rate lists, or other promotional items, that such an individual can or will perform any activities of a mortgage loan originator, while such individual engages in activities solely as a loan processor or underwriter
Forfeiture of Compensation l R. S. 6: 1092 G. – – Any person who acts as a mortgage broker, lender, or originator without complying with licensing provisions shall be subject to forfeiture of compensation attributable to residential mortgage lending activity conducted after August 15, 2001 This shall not impair the validity of note or mortgage
Public Information R. S. 6: 103 B. & R. S. 6: 1092 J. l The Commissioner may make public the following: – – – – Orders Requiring Refunds Civil Money Penalty Assessments License Suspension License Revocation Application Denials Consent Agreements Status of Applications, legal action taken pertaining to them, and legal grounds for taking such action
Continuing Education l Each licensed originator must take 8 hours of NMLS&R approved continuing education each year prior to renewal – – 3 hours of education pertaining to federal laws and regulations 2 hours of ethics, which shall include instruction on fraud, consumer protection, and fair lending issues 2 hours related to lending standards for the nontraditional mortgage product marketplace 1 hour any other course approved by NMLS&R
Testing Requirements l l l All licensed originators must obtain a passing grade on both the National and State Components of the test developed by the NMLS&R All new applicants on or after July 31, 2009 must obtain a passing grade on both components of the test before obtaining a license Originators which were licensed on or before July 30, 2009 must obtain a passing grade on both components by December 31, 2010
Testing Requirements State Component Exemption l Originators which obtained a passing grade on or after January 1, 2004 on the Louisiana pre-licensing test previously administered by PSI Exams – – Will be exempt from taking the state component of the test but must obtain a passing grade on the national component by December 31, 2010 A passing score is 75% correct answers
Testing Requirements Failing Grades l l An individual may retake one or both of the components of the test up to three consecutive times after waiting at least thirty days between tests After failing three consecutive tests the individual must wait at least six months before taking a test again
Requirement to Retake Examinations l An originator who fails to maintain a license for a period of five years or longer will be required to obtain a passing grade on both components prior to obtaining a license
Prepayment Penalties l – – – Are limited as follows: 5% of unpaid principal during first year 4% of unpaid principal during second year 3% of unpaid principal during third year 2% of unpaid principal during fourth year 1% of unpaid principal during fifth year No prepayment penalty allowed after fifth year
Prepayment Penalties Continued l No prepayment penalty may be charged or collected if all or part of the prepayment of all or part of the outstanding loan is made from insurance proceeds received for damage to the property securing the loan in connection with a Gubernatorial declared disaster
Allowable Up Front Fees By Brokers l l l Appraisal Title Search Credit Report Actual cost of Loan Prospector or Desktop Underwriter fees not to exceed $25 Licensed brokers may collect up to a $500 application fee provided: – Prior to collecting the consumer is provided a written disclosure of the amount of the fee and – The application fee shall be refundable at any time prior to ordering any service required by the lender or is the lender is unable to approve the loan after all requested documentation has been provided
Allowable Up Front Fees By Brokers (cont) – – amount collected cannot exceed good faith estimate of actual cost any portion which exceeds actual cost must be refunded to borrower or credited to their account at closing
Originator Requirements l Originator is required to sign the initial application and include their NMLS&R unique identifier l Originator may only originate loans for one employer
Lender Fees l l Lenders prohibited from collecting advance expense fees for third party settlement services that exceed Good Faith Estimate of actual cost Any portion of excess collected over actual cost must be refunded or credited to borrower at closing
Lender Fees (cont) l Licensed lenders may collect up to a $500 application fee provided: – – – Prior to collecting the consumer is provided a written disclosure of the amount of the fee and The application fee shall be refundable at any time prior to ordering any service required by the lender or is the lender is unable to approve the loan after all requested documentation has been provided NOTE: RESPA and TILA prohibit until disclosures are given
Limits on Fees and Charges l l l Late Fees limited to 5% of unpaid amount Collection fees limited to 25% when referred to an attorney NSF the greater of 5% of the amount of check or $25
Prohibition on Finance of Single Premium Insurance l l No mortgage lender shall finance or include in the loan amount any single premium credit life, dismemberment, health and accident, mortgage life and disability, involuntary unemployment, or debt cancellation insurance sold in connection with a residential mortgage loan transaction Financing of Single Premium Private Mortgage Insurance Not Prohibited
Exceptions To Prohibition on Finance of Single Premium Insurance l The prohibition on financing of single premium credit insurance does not apply to the following: – Loans with a principal balance of $50, 000 or less – Loans where the portion of the original principal balance attributable to the insurance premiums is scheduled to be fully amortized no later than the coverage expiration date of the insurance product.
Request for Payoff Amount l l Must be provided with 5 days of written request of consumer Consumer entitled to one statement per year at no charge – thereafter, lender may charge a reasonable fee provided that the fee is disclosed to the consumer before furnishing the statement
Mortgage Loan Origination Agreement l l Must be provided by broker within 3 days of the initial application Must describe the nature of broker’s relationship with borrower and the manner in which they will be compensated – – name, address, phone number, and NMLS&R unique identifier of originator name, address, phone number, and unique identifier of mortgage lender (mortgage broker)
Mortgage Loan Origination Agreement l Failure to provide a copy of the agreement subjects broker to a refund of any brokerage fees collected
Criminal Penalties l l Broker or lender knowingly collects excessive advance expense deposits Any person who knowingly provides false or misleading information on an application Any licensee or registrant who fails to disburse funds belonging a borrower Any lender, broker, or originator knowingly operating without a license
Criminal Penalties l Upon Conviction for these, person may be sentenced to: – a fine of not less than $500 nor more than $1, 000, imprisonment not exceeding one year, or both
Reverse Mortgage Loans l Reverse mortgage loan means a nonrecourse loan secured by immovable property that meets all of the following criteria: – – Loan provides purchase money proceeds for the acquisition by a borrower of a domicile to be inhabited by the borrower as his principal domicile or cash advances to a borrower based upon the equity or the value in a borrower’s inhabited principal domicile. The loan requires no payment of principal or interest until the entire loan becomes due and payable.
Reverse Mortgage Loans l l Conventional reverse mortgage loan means a reverse mortgage loan other than a program reverse mortgage loan Program reverse mortgage loan means a reverse mortgage loan offered or intended to be insured by FHA
Reverse Mortgage Loans l Prepayment in whole or part shall be permitted without penalty at any time during the term of a reverse mortgage loan l If the reverse mortgage loan provides for periodic advances, they may not be reduced in amount or number based upon any adjustment in interest rate
Reverse Mortgage Loans l A reverse mortgage may become due and payable upon one of the following: – – – Property securing loan is sold or title to the home is otherwise transferred Any fixed maturity date agreed to by borrower and lender An event of default specified in loan documents occurs
Reverse Mortgage Loans l This first page of any mortgage securing a reverse mortgage loan shall contain the following statement in ten-point bold face type: l “This mortgage secures a reverse mortgage loan. ”
Reverse Mortgage Loans Required only for conventional reverse mortgages l l l Counseling: prior to acceptance of a final and complete application or assessing any fees, lender must receive certification that the borrower has received counseling Lender may not pay any counseling fees without first informing the consumer that it may create a conflict of interest Lender must provide borrower with names of at least five nonprofit counseling agencies approved by HUD
Reverse Mortgage Loans Required only for conventional reverse mortgages l Cooling off period: At least seven (7) calendar days prior to closing a reverse mortgage loan, the lender shall provide the borrower with a loan term sheet or commitment letter outlining the proposed terms of the loan and informing the borrower that they are not obligate to proceed with the loan transaction.
Reverse Mortgage Loans duties to elders l Elder means any person sixty (60) years of age or older l Lender must provide a notice to borrower of what should be discussed with a counselor
Items counselor required to discuss l l l How unexpected medical or other events causing the borrower to move out of their home earlier than anticipated will impact the cost of the reverse mortgage Extent to which borrower’s financial needs may be better met by other options Whether the borrower intends to purchase an annuity or other financial or insurance product with proceeds Effect of repayment of loan on other residents of the domicile after borrowers are deceased or permanently abandon the domicile Borrower’s ability to finance routine or catastrophic home repairs especially if maintenance is a factor that may determine when the loan becomes payable
Items counselor required to discuss l l l The impact that a reverse mortgage may have on the borrower’s tax obligations and the eligibility for government assistance programs, and the effect that losing equity in the domicile will have on the borrower’s estate and heirs Ability of borrower to refinance alternative living accommodations, such as assisted living or long-term care, after equity is depleted If meeting with counselor is prior to meeting with a lender then counselor shall give the notice of the items listed above that are required to be discussed with the borrower.