Senator Wayne A. Harper proposes the following substitute bill:


1     
REVERSE MORTGAGE AMENDMENTS

2     
2023 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Walt Brooks

5     
Senate Sponsor: Don L. Ipson

6     

7     LONG TITLE
8     General Description:
9          This bill makes changes to reverse mortgage requirements.
10     Highlighted Provisions:
11          This bill:
12          ▸     amends the age requirement for a reverse mortgage borrower;
13          ▸     amends requirements for a prospective borrower to meet with an independent
14     housing counselor;
15          ▸     changes the requirement for a cooling off period from seven days to five days;
16          ▸     provides that certain prerequisites for initiating foreclosure proceedings do not
17     apply if the borrower is deceased;
18          ▸     defines terms; and
19          ▸     makes technical and conforming changes.
20     Money Appropriated in this Bill:
21          None
22     Other Special Clauses:
23          None
24     Utah Code Sections Affected:
25     AMENDS:
26          57-28-202, as enacted by Laws of Utah 2015, Chapter 290
27          57-28-204, as enacted by Laws of Utah 2015, Chapter 290
28          57-28-207, as enacted by Laws of Utah 2015, Chapter 290
29          57-28-304, as last amended by Laws of Utah 2016, Chapter 305
30     

31     Be it enacted by the Legislature of the state of Utah:
32          Section 1. Section 57-28-202 is amended to read:
33          57-28-202. Borrower requirements.
34          A borrower shall:
35          (1) (a) for a home equity conversion mortgage insured by the Federal Housing
36     Administration under Title 1 of the National Housing Act, 12 U.S.C. Sec. 1715z-20, be 62
37     years [of age] old or older; and
38          (b) for proprietary loans not insured by the Federal Housing Administration, be 55
39     years old or older; and
40          (2) occupy the dwelling that secures the reverse mortgage as a principal residence.
41          Section 2. Section 57-28-204 is amended to read:
42          57-28-204. Independent counseling.
43          (1) As used in this section:
44          (a) "Federally insured loan borrower" means a borrower described in Subsection
45     57-28-202(1)(a).
46          (b) "Non-federally insured loan borrower" means a borrower described in Subection
47     57-28-202(1)(b).
48          (2) [Before a prospective borrower signs a reverse mortgage application, the] A
49     prospective borrower shall meet with an independent housing counselor[.]:
50          (a) for a federally-insured loan borrower, before the Federal Housing Administration
51     assigns a case number to the borrower's loan; and
52          (b) for a non-federally insured loan borrower, before the prospective borrower signs a
53     reverse mortgage application.
54          [(2)] (3) During the meeting described in Subsection [(1)] (2):
55          (a) the prospective borrower and the independent housing counselor shall discuss the
56     financial impacts of a reverse mortgage, including:
57          (i) options other than a reverse mortgage that are or may become available to the
58     prospective borrower;
59          (ii) other home equity conversion options that are or may become available to the
60     prospective borrower, including sale-leaseback financing, a deferred payment loan, and a
61     property tax deferral; and
62          (iii) the financial implications, specific to the prospective borrower, of entering into a
63     reverse mortgage; and
64          (b) the independent housing counselor shall give the prospective borrower a written
65     disclosure that states that a reverse mortgage may:
66          (i) have tax consequences;
67          (ii) affect the prospective borrower's eligibility for assistance under certain state and
68     federal programs; and
69          (iii) impact the prospective borrower's estate and heirs.
70          Section 3. Section 57-28-207 is amended to read:
71          57-28-207. Cooling off period -- Closing.
72          (1) After a prospective borrower accepts, in writing, a lender's written commitment to
73     make a reverse mortgage, the lender may not bind the prospective borrower to the reverse
74     mortgage earlier than [seven] five days after the day on which the prospective borrower gives
75     the written acceptance to the lender.
76          (2) During the [seven-day] five-day period described in Subsection (1), the lender may
77     not require the prospective borrower to close or otherwise proceed with the reverse mortgage.
78          (3) A prospective borrower may not waive the provisions of this section.
79          Section 4. Section 57-28-304 is amended to read:
80          57-28-304. Foreclosure.
81          (1) [Before ] Except as provided in Subsection (2), before a person initiates foreclosure
82     proceedings on a reverse mortgage, the person shall:
83          [(1)] (a) send the borrower, by certified mail, return receipt requested, written notice
84     that states the grounds for default and foreclosure; and
85          [(2)] (b) provide the borrower at least 30 days after the day on which the person sends
86     the notice described in Subsection [(1)] (1)(a) to cure the borrower's default.
87          (2) This section does not apply if the borrower is deceased.