Martin M. Looney

Looney Leads Passage of Consumer Protections for Reverse Mortgage Applicants

Senate President Pro Tempore Martin M. Looney (D-New Haven) today led State Senate passage of Senate Bill 150 to protect consumers applying for reverse mortgages. The bill passed the chamber unanimously.

Senator Looney’s bill expands the counseling and certification requirements for reverse annuity mortgages, a type of mortgage that allows homeowners to convert accumulated home equity into liquid assets.

“There is an alarming number of reports of reverse mortgage lenders preying on seniors in Connecticut, especially on the elderly who are having health or mental health problems,” said Senator Looney. “Those that have been taken advantaged of are left in a dire financial situation with few places to turn. This bill provides critical consumer protections for seniors hoping to utilize the equity in their homes. I want to thank Senator Doug McCrory, the Aging Committee’s co-chair, for his leadership in guiding this important legislation through the committee process.”

“Senior citizens are more vulnerable to deceptive practices so it’s important that we as policy makers take additional steps to protect them,” Aging Committee Co-chair Senator Doug McCrory (D-Hartford) said. “This bill requiring special intervention procedures for seniors applying for reverse mortgages will ensure that they are not being taken advantage of.”

“I’ve had many conversations with some of my older constituents who have had trouble navigating the requirements of a reverse mortgage,” said state Senator Terry Gerratana (D-New Britain). “Passing this bill, with its higher level of counseling, will help stop some of the abuse that is occurring when people seek to take advantage of senior citizens.”

The bill requires reverse mortgage lenders to:

• inform prospective applicants of the counseling requirements and provide them with a list of independent housing counseling agencies and intermediaries approved by the U.S. Department of Housing and Urban Development (HUD) to provide counseling in accordance with federal law
• receive a signed certification from the prospective applicant or his or her authorized representative that the applicant or representative received counseling in-person or by telephone from a HUD-approved agency; and
• keep the signed certification in an accurate, reproducible, and accessible format for the term of the loan

Under the bill, the counseling certification must include the counseling date and the name, address, telephone number, and signature of both the prospective applicant or representative and counselor.