Connecticut House Bill HB05651

Connecticut 2015 Regular Session

• Introduced: 1/21/15
• Refer: 1/21/15
• Refer: 2/18/15

Caption

An Act Implementing The Recommendations Of The Task Force On Reverse Mortgages.

Impact

This legislation significantly alters the process by which reverse mortgages are offered in Connecticut, particularly emphasizing a consumer protection aspect. Initially, the bill mandates that lenders provide applicants with a seven-day reflection period after counseling before accepting their application. The Connecticut Housing Finance Authority is tasked with implementing a program to facilitate these loans primarily for homeowners over the age of seventy who require long-term care. These measures are believed to help homeowners maintain their residence and avoid or delay entry into nursing facilities.

Summary

House Bill 05651, titled 'An Act Implementing the Recommendations of the Task Force on Reverse Mortgages,' focuses on establishing a safer framework for reverse mortgages. The bill dictates that prior to finalizing a reverse annuity loan application, lenders must ensure that potential applicants receive counseling from approved independent housing counseling agencies. This requirement aims to protect consumers, particularly the elderly, who may not be fully aware of the implications of reverse mortgages or the long-term impacts on their home's equity.

Sentiment

The sentiment surrounding HB 05651 appears to be largely supportive, especially among advocates for seniors and consumer rights organizations. Proponents argue that the mandatory counseling and reflection period will lead to more informed decisions by prospective borrowers. Critics, however, may express concerns regarding the feasibility of counseling accessibility and whether the added requirements could complicate the lending process for both borrowers and lenders.

Contention

Notable points of contention regarding this bill include potential challenges related to the implementation and accessibility of counseling services. While meant to protect consumers, some stakeholders caution that these requirements could inadvertently limit the availability of reverse mortgages or create additional burdens for financial institutions. Additionally, debates may arise around the financial implications on lenders resulting from the stricter regulations.