GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1995

S	2 

SENATE BILL 125*
Committee Substitute Favorable 3/22/95

Short Title:  Remove Sunset on Reverse Mortgages.	(Public)

─────────────────────────────────────── 
Sponsors:

─────────────────────────────────────── 
Referred to:  

─────────────────────────────────────── 

February 2, 1995

A BILL TO BE ENTITLED
AN ACT TO REMOVE THE SUNSET ON REVERSE MORTGAGES AND TO CHANGE THE DISCLOSURE REQUIREMENTS FOR REVERSE MORTGAGE LOANS.
The General Assembly of North Carolina enacts:
Section 1.  Section 3 of Chapter 546 of the 1991 Session Laws reads as rewritten:
"Sec. 3.  This act becomes effective October 1, 1991.  ."
Sec. 2.  G.S. 53-264 reads as rewritten:
"§ 53-264.  Disclosures of loan terms.
(a)	On forms prescribed by the Commissioner, all authorized lenders shall provide all of the following information to the Commissioner for dissemination to all counselors who provide counseling to prospective reverse mortgage borrowers:
(1)	The borrower's rights, obligations, and remedies with respect to the borrower's temporary absence from the home, late payments by the lender, and payment default by the lender.
(2)	Conditions or events that require the borrower to repay the loan obligation.
(3)	The right of the borrower to mortgage less than the full value of the home, if permitted by the reverse mortgage loan contract.
(4)	The projected total annual percentage rate applicable under various loan terms and appreciation rates and interest rates applicable at sample ages of borrowers.  Compliance with the disclosure requirements relating to reverse mortgages set forth in Chapter 2 of Title I of the Federal Truth in Lending Act shall constitute compliance with this subsection.
(5)	Standard closing costs.
(6)	All service fees to be charged during the term of the loan.
(7)	Other information required by the Commissioner.
(b)	Within 10 business days after application is made by a borrower, but not less than 20 business days before closing of the loan, lenders shall provide applicants with the same information required in subsection (a) of this section, shall inform applicants that reverse mortgage counseling is available, and shall provide the names and addresses of counselors listed with the Commissioner's office.  The lender shall maintain a copy of a disclosure form signed by the borrower stating the borrower has received the information required in subsections (a) and (b)."
Sec. 3.  G.S. 53-270 reads as rewritten:
"§ 53-270.  Prohibited acts.
Reverse mortgage lenders are prohibited from engaging in any of the following acts in connection with the making, servicing, or collecting of a reverse mortgage loan:
(1)	Misrepresenting material facts, making false promises, or engaging in a course of misrepresentation through agents or otherwise.
(2)	Failing to disburse funds in accordance with the terms of the reverse mortgage loan contract or other written commitment.
(3)	Improperly refusing to issue a satisfaction of a mortgage.
(4)	Engaging in any action or practice that is unfair or deceptive, or that operates a fraud on any person.
(5)	Contracting for or receiving shared appreciation.
	(6)	Failing to comply with this Article."
Sec. 4.  This act is effective upon ratification.