§ 34-25.1-9 - Required counseling.
SECTION 34-25.1-9
§ 34-25.1-9 Required counseling. –(a) All lenders shall deliver to all reverse mortgage loan applicants astatement, if available, prepared by the department of elderly affairs on theadvisability and availability of independent counseling and informationservices. With respect to every reverse mortgage loan, the prospectivemortgagor(s) shall complete a reverse mortgage counseling program. An originalcertificate, dated and signed by both the counselor and the mortgagor(s),certifying that the counseling required by § 34-25.1-9 has taken place,shall be delivered to the mortgagee at least three (3) business days prior tothe closing of the loan. The lender shall not process a reverse mortgage loanapplication, other than ordering an automated valuation model and a preliminarytitle search, until the counseling required by this section has been completedand the certificate of counseling is delivered to the mortgagee.
(b) The reverse mortgage counseling program shall include,but is not limited to, all matters enumerated in subsections 34-25.1-9(e)(1)through (6). The department of elderly affairs shall establish and maintain alist of counseling programs that are deemed to satisfy the requirements of§ 34-25.1-9 and shall make such list available to all lenders and to thepublic. A counseling agency approved by the United States Department of Housingand Urban Development to provide reverse mortgage counseling shall be deemed tobe approved to provide the counseling required by § 34-25.1-9, providedthat: (1) the counseling agency is not affiliated with the reverse mortgagelender; and (2) the counseling agency complies with the counseling requirementsof § 34-25.1-9. The director of the department of elderly affairs shallhave the right to prescribe the form of counseling certificate that will meetthe requirements of subsection 34-25.1-9(a).
(c) Counseling shall comply with the following requirements:(1) It shall be conducted in person; however, if the prospective mortgagor(s)cannot or choose(s) not to travel to a housing counseling agency and cannot bevisited by a counselor in their home, telephone counseling shall be permittedby counseling agencies that are authorized by the department of elderly affairsto conduct telephone counseling. (2) The reverse mortgage loan shall closewithin one hundred eighty (180) days after the prospective mortgagor(s) sign(s)the counseling certificate. If the reverse mortgage loan does not close withinsuch one hundred eighty (180) day period, the parties shall be required toagain comply with the counseling requirements of this section. (3) Mortgageesshall provide prospective mortgagors with the name of at least three (3)independent, authorized counseling agencies in the state. The mortgagee shallnot recommend a counseling agency that is an affiliate of the mortgagee.
(d) In the event that counseling shall not be available freeof charge, the mortgagee shall be responsible for the cost of the counseling tothe extent that all other sources or funding the counseling by legitimatesources including, without limitation, non-profit organizations and grants havenot been obtained. In the event that 12 U.S.C. § 1715z-20 or the federalregulations promulgated with respect thereto shall, at the time such counselingfee is due and payable by the mortgagee, expressly prohibit a mortgagee frombeing responsible for the cost of counseling, then subsection 34-25.1-9(d)shall not apply to a reverse mortgage loan that is subject to 12 U.S.C. §1715z-20 and the federal regulations promulgated with respect thereto.
(e) Counseling shall include, without limitation, discussionof the following with the prospective mortgagor(s):
(1) Options other than a reverse mortgage that are availableto the mortgagor(s), including other housing, social service, health, andfinancial options;
(2) Other home equity conversion options that are or maybecome available to the mortgagor(s), such as other reverse mortgages,sale-leaseback financing, deferred payment loan, and property tax deferral;
(3) The financial implications of entering into a reversemortgage;
(4) A disclosure that a reverse mortgage may have taxconsequences, affect eligibility for assistance under federal and stateprograms, and have an impact on the estate and heirs of the homeowner(s), aswell as an explanation of how the reverse mortgage may affect the estate andpublic benefits of the mortgagor(s);
(5) Such other topics as shall be required to be addressedduring counseling with respect to a reverse mortgage pursuant to 12 U.S.C.§ 1715z-20, and/or any regulations promulgated pursuant thereto; and
(6) Such other topics as shall be required to be addressed bythe director of the department of elderly affairs.
(f) Subsections 34-25.1-9(b), (c) and (e) shall not apply toany reverse mortgage loan that is subject to 12 U.S.C. § 1715z-20 and thefederal regulations promulgated with respect thereto; provided that such loancomplies with the counseling requirements set forth in 12 U.S.C. §1715z-20 and the federal regulations promulgated with respect thereto(including without limitation 24 CFR Part 206).