GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1997

H	1 

HOUSE BILL 1075

Short Title:  Appreciation of Reverse Mortgages.	(Public)

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Sponsors: Representatives Hall; Baker, Bonner, Boyd-McIntyre, Culp, Cunningham, Davis, Eddins, Fox, Grady, Hiatt, Hill, Justus, Kinney, Kiser, Mitchell, Morris, Mosley, Owens, Rayfield, Sherrill, Smith, Starnes, Tolson, Weatherly, Wilkins, C. Wilson, and Womble.

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Referred to:  Commerce, if favorable, Judiciary I.

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April 21, 1997

A BILL TO BE ENTITLED
AN ACT TO PERMIT LENDERS TO CONTRACT FOR AND RECEIVE SHARED APPRECIATION IN CERTAIN CIRCUMSTANCES.
The General Assembly of North Carolina enacts:
Section 1.  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 or shared equity, other than in an amount:
a.	Not to exceed ten percent (10%) of the value of the property at the time of the loan repayment; and
b.	Permitted in conjunction with a loan that:
1.	Is outstanding for 24 months or longer; and
2.	Either (i) is guaranteed or insured by an agency of the federal government, or (ii) has originated under a reverse mortgage program approved by the Federal National Mortgage Corporation, the Government National Mortgage Association, or the Federal Home Loan Mortgage Corporation.
(6)	Closing a reverse mortgage loan without receiving certification from a person who is certified as a reverse mortgage counselor by the State that the borrower has received counseling on the advisability of a reverse mortgage loan and the appropriate reverse mortgage loan for the borrower.
(7)	Failing to comply with this Article."
Section 2.  This act becomes effective October 1, 1997, and applies to contracts for loans entered into on or after that date.