#AceFinanceNews – UNITED STATES (California) – July 10 – A bill that would require California reverse mortgage lenders to provide certain disclosures to prospective borrowers during the application process is moving forward in the state’s legislature as it awaits a Senate vote.
Sponsored by Assemblyman Jose Medina (D-CA), AB 1700 aims to amend certain sections of California’s Civil Code relating to reverse mortgages.
Specifically, the bill would implement a seven day cooling off period, prohibiting a lender from taking a reverse mortgage application or assessing any fees until one week from the date of loan counselling.
Additionally, the bill would delete the requirement that the lender provide a written check-list and would, instead, prohibit a lender from taking the loan application unless the applicant has received from the lender a specified reverse mortgage worksheet guide.
The bill would require that the guide contain certain issues that the borrower is advised to consider and discuss with a HUD-approved housing counsellor, as well as requiring both the counsellor and the prospective borrower to sign the worksheet guide prior to closing.
“ These requirements seek to ensure that senior citizens will make informed decisions and that persons who offer, sell, or arrange the sale of reverse mortgages to senior citizens will act in the best interest of reverse mortgage loan borrowers,” states Section 1 of California’s Civil Code.
Seal of the United States Federal Trade Commission. (Photo credit: Wikipedia)
The Federal Trade Commission mailed more than 13,000 refund checks to consumers who were allegedly deceived by a company that claimed it would negotiate with lenders to change the consumers’ mortgages and make them more affordable. To resolve FTC charges, First Universal Lending and its owners agreed to an order banning them from the mortgage relief services business.
The FTC alleged that the operators of First Universal Lending encouraged homeowners to stop making mortgage payments. The defendants charged consumers up-front fees, but then did little or nothing to help them, the agency charged.
The checks were mailed by an administrator working for the FTC. More than $723,000 was returned to consumers. The amount varied based upon the amount of each consumer’s loss. Those who receive checks from the FTC’s refund administrator should cash them on or before October 6, 2012. The FTC never requires consumers to pay money or provide information before redress checks can be cashed. Consumers with questions should call the refund administrator, Gilardi & Co., LLC, at 1-888-251-6825, or visit www.FTC.gov/refunds.
To learn how to avoid mortgage help relief scams, read the FTC’s Mortgage Assistance Relief Scams: Another Potential Stress for Homeowners in Distress and Mortgage Payments Sending You Reeling? Here’s What to Do.
The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics.