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Washington State imposes new protections for reverse mortgage borrowers 2010-04-15 A new Washington State consumer loan bill, signed into law by the governor last month, will provide additional protections to reverse mortgage borrowers. The bill, HB 2608, will take effect on July 1. When it does, mortgage servicers - including those who collect interest or otherwise manage reverse mortgages - will have to register their fingerprints with state authorities and the Federal Bureau of Investigation as part of the licensing process. All mortgage lenders will have to be nationally licensed; they also cannot have been convicted of a misdemeanor related to lending for the past seven years. Washington's consumer-loan bill is representative of a broader trend towards greater financial-product transparency. A new consumer protection agency is an integral part of Congress' financial-industry reform package, for example. And while the federal government does not appear to be drafting new protections for reverse mortgagees, Washington State is taking the lead on that issue. The state stipulates that reverse mortgage servicing is defined as "Calculating, collecting, or receiving payments of interest or other amounts due; administering advances to the borrower; and providing account statements to the borrower or lender" of a reverse mortgage.  |
