Source: http://law2.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1715z-20&num=0&edition=prelim
Timestamp: 2019-04-23 09:57:16+00:00

Document:
(2) to encourage and increase the involvement of mortgagees and participants in the mortgage markets in the making and servicing of home equity conversion mortgages for elderly homeowners.
(1) The terms "elderly homeowner" and "homeowner" mean any homeowner who is, or whose spouse is, at least 62 years of age or such higher age as the Secretary may prescribe.
(2) The terms "mortgagee", "mortgagor", "real estate," 1 and "State" have the meanings given such terms in section 1707 of this title.
(3) The term "home equity conversion mortgage" means a first mortgage which provides for future payments to the homeowner based on accumulated equity and which a housing creditor (as defined in section 3802(2) of this title) is authorized to make (A) under any law of the United States (other than section 3803 of this title) or applicable agency regulations thereunder; (B) in accordance with section 3803 of this title, notwithstanding any State constitution, law, or regulation; or (C) under any State constitution, law, or regulation.
(B) under a lease that has a term that ends no earlier than the minimum number of years, as specified by the Secretary, beyond the actuarial life expectancy of the mortgagor or comortgagor, whichever is the later date.
(5) First mortgage.-The term "first mortgage" means such classes of first liens as are commonly given to secure advances on, or the unpaid purchase price of, real estate or a first or subordinate lien on all stock allocated to a dwelling unit in a residential cooperative housing corporation, under the laws of the State in which the real estate or dwelling unit is located, together with the credit instruments, if any, secured thereby.
(3) have a potential for acceptance in the mortgage market.
(11) have been made with such restrictions as the Secretary determines to be appropriate to ensure that the mortgagor does not fund any unnecessary or excessive costs for obtaining the mortgage, including any costs of estate planning, financial advice, or other related services.
(B) the cost for a loan term equaling the actuarial life expectancy of the mortgagor.
(5) any other information that the Secretary may require.
The Secretary shall consult with consumer groups, industry representatives, representatives of counseling organizations, and other interested parties to identify alternative approaches to providing consumer information required by this subsection that may be feasible and desirable for home equity conversion mortgages insured under this section and other types of reverse mortgages. The Secretary may, in lieu of providing the consumer education required by this subsection, adopt alternative approaches to consumer education that may be developed as a result of such consultations, but only if the alternative approaches provide all of the information specified in this subsection.
The aggregate number of mortgages insured under this section may not exceed 275,000. In no case may the benefits of insurance under this section exceed the maximum dollar amount limitation established under section 1454(a)(2) of this title for a 1-family residence.
(3) establish, by notice or mortgagee letter, any additional or alternative requirements that the Secretary, in the Secretary's discretion, determines are necessary to improve the fiscal safety and soundness of the program authorized by this section, which requirements shall take effect upon issuance.
(C) to provide any mortgagee under this section with funds not to exceed the limitations in subsection (g) to which the mortgagee is entitled under the terms of the insured mortgage or ancillary contracts authorized in this section.
The Secretary may not insure a home equity conversion mortgage under this section unless such mortgage provides that the homeowner's obligation to satisfy the loan obligation is deferred until the homeowner's death, the sale of the home, or the occurrence of other events specified in regulations of the Secretary. For purposes of this subsection, the term "homeowner" includes the spouse of a homeowner. Section 1647(b) of title 15 and any implementing regulations issued by the Board of Governors of the Federal Reserve System shall not apply to a mortgage insured under this section.
The Secretary may, upon application by a mortgagee, insure under this subsection any mortgage given to refinance an existing home equity conversion mortgage insured under this section.
The Secretary shall, by regulation, require that the mortgagee of a mortgage insured under this subsection, provide to the mortgagor, within an appropriate time period and in a manner established in such regulations, a good faith estimate of: (A) the total cost of the refinancing; and (B) the increase in the mortgagor's principal limit as measured by the estimated initial principal limit on the mortgage to be insured under this subsection less the current principal limit on the home equity conversion mortgage that is being refinanced and insured under this subsection.
(C) the time between the closing of the original home equity conversion mortgage that is refinanced through the mortgage insured under this subsection and the application for a refinancing mortgage insured under this subsection does not exceed 5 years.
Notwithstanding section 1709(c)(2)(A) of this title, the Secretary may reduce the amount of the single premium payment otherwise collected under such section at the time of the insurance of a mortgage refinanced and insured under this subsection. The amount of the single premium for mortgages refinanced under this subsection shall be determined by the Secretary based on the actuarial study required under paragraph (5).
(C) the combined effect of reduced insurance premiums and a single national limitation on insurance authority.
The Secretary may establish a limit on the origination fee that may be charged to a mortgagor under a mortgage insured under this subsection, except that such limitation shall provide that the origination fee may be fully financed with the mortgage and shall include any fees paid to correspondent mortgagees approved by the Secretary.
The Secretary may use a portion of the mortgage insurance premiums collected under the program under this section to adequately fund the counseling and disclosure activities required under subsection (f), including counseling for those homeowners who elect not to take out a home equity conversion mortgage, provided that the use of such funds is based upon accepted actuarial principles.
Notwithstanding any other provision of this section, the Secretary may insure, upon application by a mortgagee, a home equity conversion mortgage upon such terms and conditions as the Secretary may prescribe, when the home equity conversion mortgage will be used to purchase a 1- to 4-family dwelling unit, one unit of which the mortgagor will occupy as a primary residence, and to provide for any future payments to the mortgagor, based on available equity, as authorized under subsection (d)(9).
A home equity conversion mortgage insured pursuant to paragraph (1) shall involve a principal obligation that does not exceed the dollar amount limitation determined under section 1454(a)(2) of this title for a 1-family residence.
(ii) the mortgagor shall not be required, directly or indirectly, as a condition of obtaining a mortgage under this section, to purchase any other financial or insurance product.
All parties that participate in the origination of a mortgage to be insured under this section shall be approved by the Secretary.
The mortgagor or any other party shall not be required by the mortgagee or any other party to purchase an insurance, annuity, or other similar product as a requirement or condition of eligibility for insurance under subsection (c), except for title insurance, hazard, flood, or other peril insurance, or other such products that are customary and normal under subsection (c), as determined by the Secretary.
The Secretary shall conduct a study to examine and determine appropriate consumer protections and underwriting standards to ensure that the purchase of products referred to in subsection (o) is appropriate for the consumer. In conducting such study, the Secretary shall consult with consumer advocates (including recognized experts in consumer protection), industry representatives, representatives of counseling organizations, and other interested parties.
(6) be subject to a maximum origination fee of $6,000, except that such maximum limit shall be adjusted in accordance with the annual percentage increase in the Consumer Price Index of the Bureau of Labor Statistics of the Department of Labor in increments of $500 only when the percentage increase in such index, when applied to the maximum origination fee, produces dollar increases that exceed $500.
2013-Subsec. (h)(3). Pub. L. 113–29 added par. (3).
2009-Subsec. (b)(4)(B). Pub. L. 111–22 added subpar. (B) and struck out former subpar. (B), which read as follows: "under a lease having a period of not less than 10 years to run beyond the maturity date of the mortgage."
2008-Subsec. (b)(2). Pub. L. 110–289, §2122(a)(1), inserted " 'real estate,' " after " 'mortgagor', ".
Subsec. (b)(4). Pub. L. 110–289, §2122(b)(1), in introductory provisions, inserted "a first or subordinate mortgage or lien" before "on all stock", "unit" before "in a residential", and "a first mortgage or first lien" before "on a leasehold".
Subsec. (b)(5). Pub. L. 110–289, §2122(b)(2), inserted "a first or subordinate lien on" before "all stock".
Subsec. (d)(1). Pub. L. 110–289, §2122(a)(2), amended par. (1) generally. Prior to amendment, par. (1) read as follows: "have been made to a mortgagee approved by the Secretary as responsible and able to service the mortgage properly;".
Subsec. (d)(2)(B). Pub. L. 110–289, §2122(a)(3), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: "has received adequate counseling by a third party (other than the lender) as provided in subsection (f) of this section;".
Subsec. (f). Pub. L. 110–289, §2122(a)(4), substituted "Counseling services and information for mortgagors" for "Information services for mortgagors" in heading and amended introductory provisions generally. Prior to amendment, introductory provisions read as follows: "The Secretary shall provide or cause to be provided by entities other than the lender the information required in subsection (d)(2)(B) of this section. Such information shall be discussed with the mortgagor and shall include-".
Subsec. (g). Pub. L. 110–289, §2122(a)(5), substituted "limitation established under section 1454(a)(2) of this title for a 1-family residence" for "established under section 1709(b)(2) of this title for 1-family residences in the area in which the dwelling subject to the mortgage under this section is located".
Subsec. (i)(2)(A). Pub. L. 110–289, §2118(b)(2), substituted "Mutual Mortgage Insurance Fund" for "General Insurance Fund".
Subsec. (l). Pub. L. 110–289, §2122(a)(8), amended subsec. (l) generally. Prior to amendment, subsec. (l) related to funding for counseling and consumer education and outreach.
Pub. L. 110–289, §2122(a)(6), (7), redesignated subsec. (m) as (l) and struck out former subsec. (l) which related to waiver of up-front premiums for mortgages to fund long-term care insurance.
Subsecs. (m) to (p). Pub. L. 110–289, §2122(a)(9), added subsecs. (m) to (p). Former subsec. (m) redesignated (l).
Subsec. (r). Pub. L. 110–289, §2122(c), added subsec. (r).
2006-Subsec. (g). Pub. L. 109–289 substituted "275,000" for "250,000".
2005-Subsec. (g). Pub. L. 109–13 substituted "250,000" for "150,000".
2000-Subsec. (b)(2). Pub. L. 106–569, §201(b)(1), struck out " 'mortgage'," before " 'mortgagee',".
Subsec. (b)(4), (5). Pub. L. 106–569, §201(b)(2), added pars. (4) and (5).
Subsecs. (k) to (m). Pub. L. 106–569, §201(a)(1), (c)(1), added subsecs. (k) and (l) and redesignated former subsec. (k) as (m).
1998-Pub. L. 105–276, §593(d)(1), struck out "Demonstration program of" before "Insurance" in section catchline.
"(C) the appropriate scope and nature of participation by the Secretary in connection with home equity conversion mortgages for elderly homeowners."
Subsec. (d)(2)(C), (D). Pub. L. 105–276, §593(e)(1)(A), added subpar. (C) and redesignated former subpar. (C) as (D).
Subsec. (d)(11). Pub. L. 105–276, §593(e)(1)(B)–(D), added par. (11).
Subsec. (f). Pub. L. 105–276, §593(b), inserted concluding provisions.
Subsec. (g). Pub. L. 105–276, §593(a), substituted "The aggregate number of mortgages insured under this section may not exceed 150,000." for "No mortgage may be insured under this section after September 30, 2000, except pursuant to a commitment to insure issued on or before such date. The total number of mortgages insured under this section may not exceed 50,000."
Subsec. (i)(1). Pub. L. 105–276, §593(d)(2), struck out "demonstration" before "program" in introductory provisions.
Subsec. (k). Pub. L. 105–276, §593(d)(4), (5), redesignated subsec. (l) as (k) and struck out heading and text of former subsec. (k), which had required interim report not later than Sept. 30, 1989, on design and implementation of demonstration program of insurance of home equity conversion mortgages for elderly homeowners, preliminary evaluation of program incorporating comments and recommendations not later than Mar. 30, 1992, and updated report and evaluation biennially thereafter, including analysis of repayment of home equity conversion mortgages during report period.
Subsec. (l). Pub. L. 105–276, §593(d)(5), redesignated subsec. (l) as (k).
Pub. L. 105–276, §593(c), added subsec. (l).
1996-Subsec. (d)(3). Pub. L. 104–120, §6(c), amended par. (3) generally. Prior to amendment, par. (3) read as follows: "be secured by a dwelling that is designed principally for a 1-family residence and is occupied by the mortgagor;".
Subsec. (g). Pub. L. 104–120, §6(a), (b), substituted "2000" for "1996" and "50,000" for "30,000".
Pub. L. 104–99 substituted "1996" for "1995" and "30,000" for "25,000".
1992-Subsec. (g). Pub. L. 102–389 and Pub. L. 102–550, §503(c)(2), amended subsec. (g) identically, substituting "for 1-family residences in the area in which the dwelling subject to the mortgage under this section is located" for "for a 1-family residence".
Subsec. (j). Pub. L. 102–550, §520, inserted at end "Section 1647(b) of title 15 and any implementing regulations issued by the Board of Governors of the Federal Reserve System shall not apply to a mortgage insured under this section."
1990-Subsec. (d)(7)(A). Pub. L. 101–625, §334(c), added subpar. (A) and struck out former subpar. (A) which read as follows: "the foreclosure sale; or".
Subsec. (d)(9), (10). Pub. L. 101–625, §334(b), added pars. (9) and (10).
Subsec. (e)(2). Pub. L. 101–625, §334(d)(1), substituted "statement informing the homeowner that the liability of the homeowner under the mortgage is limited and" for "statement" and struck out "and" at end.
Subsec. (e)(4). Pub. L. 101–625, §334(d)(2), (3), added par. (4).
Subsec. (g). Pub. L. 101–508, §2106, substituted "September 30, 1995" for "September 30, 1991" and "may not exceed 25,000" for "may not exceed 2,500".
1988-Subsec. (b)(3). Pub. L. 100–628, §1066(a), made technical amendment to reference to section 3802(2) of this title to correct reference to corresponding provision of original act.
Subsec. (d)(3). Pub. L. 100–628, §1066(b), struck out "and that has a value not to exceed the maximum dollar amount established by the Secretary under section 1709(b)(2) of this title for a 1-family residence" after "by the mortgagor".
Pub. L. 106–569, title II, §201(c)(2), Dec. 27, 2000, 114 Stat. 2951 , provided that: "The provisions of section 255(l) of the National Housing Act [former 12 U.S.C. 1715z–20(l)] (as added by paragraph (1) of this subsection) shall apply only to mortgages closed on or after April 1, 2001."
Pub. L. 105–276, title V, §593(f), Oct. 21, 1998, 112 Stat. 2655 , provided that: "This section [amending this section and enacting provisions set out as a note below] shall take effect on, and the amendments made by this section are made on, and shall apply beginning upon, the date of the enactment of this Act [Oct. 21, 1998]."
Amendment by Pub. L. 104–120 to be construed to have become effective Oct. 1, 1995, see section 13(a) of Pub. L. 104–120, set out as an Effective and Termination Dates of 1996 Amendments note under section 1437d of Title 42, The Public Health and Welfare.
Pub. L. 106–569, title II, §201(a)(2), Dec. 27, 2000, 114 Stat. 2949 , provided that: "The Secretary shall issue any final regulations necessary to implement the amendments made by paragraph (1) of this subsection [amending this section], which shall take effect not later than the expiration of the 180-day period beginning on the date of the enactment of this Act [Dec. 27, 2000]. The regulations shall be issued after notice and opportunity for public comment in accordance with the procedure under section 553 of title 5, United States Code, applicable to substantive rules (notwithstanding subsections (a)(2), (b)(B), and (d)(3) of such section)."
Pub. L. 100–242, title IV, §417(b), Feb. 5, 1988, 101 Stat. 1912 , directed Secretary of Housing and Urban Development, not later than 6 months after Feb. 5, 1988, to consult with lenders, insurers, and organizations and individuals with expertise in home equity conversion in developing proposed regulations implementing this section and not later than 9 months after Feb. 5, 1988, to issue proposed regulations implementing this section.
"(A) Notice.-The Secretary of Housing and Urban Development shall, by interim notice, implement the amendments made by paragraph (1) [amending this section] in an expeditious manner, as determined by the Secretary. Such notice shall not be effective after the date of the effectiveness of the final regulations issued under subparagraph (B) of this paragraph.
"(B) Regulations.-The Secretary shall, not later than the expiration of the 90-day period beginning on the date of the enactment of this Act [Oct. 21, 1998], issue final regulations to implement the amendments made by paragraph (1). Such regulations shall be issued only after notice and opportunity for public comment pursuant to the provisions of section 553 of title 5, United States Code (notwithstanding subsections (a)(2) and (b)(3)(B) of such section)."
1 So in original. The comma probably should follow the closed quotes.
2 So in original. No subsec. (q) has been enacted.

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