2023 Rhode Island General Laws › Title 34 - Property › Chapter 34-25.1 - Reverse Mortgages › Section 34-25.1-9. - Required counseling.

§ 34-25.1-9. Required counseling.
(a)
All lenders shall deliver to all reverse mortgage loan applicants a statement, if available, prepared by the office of healthy aging on the advisability and availability of independent counseling and information services. With respect to every reverse mortgage loan, the prospective mortgagor(s) shall complete a reverse mortgage counseling program. An original certificate, dated and signed by both the counselor and the mortgagor(s), certifying that the counseling required by this section has taken place, shall be delivered to the mortgagee at least three (3) business days prior to the closing of the loan. The lender shall not process a reverse mortgage loan application, other than ordering an automated valuation model, ordering a credit report, obtaining information required for inclusion in a loan application, including documenting and verifying credit, income, assets and property charges, evaluating extenuating circumstances and compensating factors, evaluating the results of the financial assessment in determining eligibility for a home equity conversion mortgage, determining whether a life expectancy set-aside will be required and whether the set-aside must be fully or partially funded, and completing a home equity conversion mortgage financial assessment worksheet; and ordering a preliminary title search, until the counseling required by this section has been completed and the certificate of counseling is delivered to the mortgagee.
(b)
The reverse mortgage counseling program shall include, but is not limited to, all matters enumerated in subsections (e)(1) through (e)(6) of this section. The office of healthy aging shall maintain a list of counseling programs and agencies approved by the United States Department of Housing and Urban Development and the Federal Housing Administration to satisfy the requirements of this section and shall make such list available to all lenders and to the public, provided that: (1) the counseling agency is not affiliated with the reverse mortgage lender; and (2) the counseling agency complies with the counseling requirements of this section. The director of the office of healthy aging shall have the right to prescribe the form of counseling certificate that will meet the requirements of subsection (a) of this section.
(c)
Counseling shall comply with the following requirements: (1) It shall be conducted in person; however, if the prospective mortgagor(s) cannot or choose(s) not to travel to a housing counseling agency and cannot be visited by a counselor in their home, telephone counseling shall be permitted by counseling agencies that are authorized by the United States Department of Housing and Urban Development or the Federal Housing Administration to conduct telephone counseling. (2) The reverse mortgage loan shall close within one hundred eighty (180) days after the prospective mortgagor(s) sign(s) the counseling certificate. If the reverse mortgage loan does not close within such one hundred eighty (180) day period, the parties shall be required to again comply with the counseling requirements of this section. (3) Mortgagees shall provide prospective mortgagors with the name of at least three (3) independent, authorized counseling agencies approved by the United States Department of Housing and Urban Development or the Federal Housing Administration. The mortgagee shall not recommend a counseling agency that is an affiliate of the mortgagee.
(d)
In the event that counseling shall not be available free of charge, the mortgagee shall be responsible for the cost of the counseling to the extent that all other legitimate sources of funding the counseling including, without limitation, nonprofit organizations and grants have not been obtained. In the event that 12 U.S.C. § 1715z-20 or the federal regulations promulgated with respect thereto shall, at the time such counseling fee is due and payable by the mortgagee, expressly prohibit a mortgagee from being responsible for the cost of counseling, then subsection (d) of this section shall not apply to a reverse mortgage loan that is subject to 12 U.S.C. § 1715z-20 and the federal regulations promulgated with respect thereto.
(e)
Counseling shall include, without limitation, discussion of the following with the prospective mortgagor(s):
(1)
Options other than a reverse mortgage that are available to the mortgagor(s), including other housing, social service, health, and financial options;
(2)
Other home equity conversion options that are or may become available to the mortgagor(s), such as other reverse mortgages, sale-leaseback financing, deferred payment loan, and property tax deferral;
(3)
The financial implications of entering into a reverse mortgage;
(4)
A disclosure that a reverse mortgage may have tax consequences, affect eligibility for assistance under federal and state programs, and have an impact on the estate and heirs of the homeowner(s), as well as an explanation of how the reverse mortgage may affect the estate and public benefits of the mortgagor(s);
(5)
Such other topics as shall be required to be addressed during counseling with respect to a reverse mortgage pursuant to 12 U.S.C. § 1715z-20, and/or any regulations promulgated pursuant thereto; and
(6)
Such other topics as shall be required to be addressed by the director of the office of healthy aging.
(f)
Subsections (b), (c), (e) of this section shall not apply to any reverse mortgage loan that is subject to 12 U.S.C. § 1715z-20 and the federal regulations promulgated with respect thereto; provided that such loan complies with the counseling requirements set forth in 12 U.S.C. § 1715z-20 and the federal regulations promulgated with respect thereto (including without limitation 24 C.F.R. Part 206).
History of Section.
P.L. 2008, ch. 19, § 2; P.L. 2008, ch. 21, § 2; P.L. 2015, ch. 128, § 1; P.L. 2015, ch. 135, § 1; P.L. 2016, ch. 511, art. 1, § 15.