West Virginia Code of State Rules › Agency 106 - Banking › Title 106 - LEGISLATIVE RULE COMMISSIONER OF FINANCIAL INSTITUTIONS › Series 106-19 - Rules For Reverse Mortgage Loans › Section 106-19-6 - Requirements for Reverse Mortgage Loans

Current through Register Vol. XLI, No. 28, July 12, 2024
6.1. Security Instrument. -- The security
				instrument shall expressly and conspicuously bear a legend identifying the
				security as a reverse mortgage.
6.2. Single Family Dwelling. -- The reverse
				mortgage loan shall be secured by a first lien on real property improved by a
				one-unit single family dwelling that is the residence of the mortgagor(s). The
				proceeds of a reverse mortgage loan are to be advanced to the mortgagor(s)
				during the life of the loan in equal installments, in advances through a line
				of credit or otherwise, in lump sums, or through a combination
				thereof.
6.3. Comply with Federal
				Laws. -- All lenders shall comply with all applicable federal laws and
				regulations, including but not limited to the applicable sections of the Truth
				in Lending Act (15 USC ' 1601 et seq.), the Equal Credit Opportunity Act (15
				USC ' 1691 et seq.) and the Real Estate Settlement Procedures Act (12 USC '
				2601 et seq.).
6.4. Comply with
				State Laws. B All lenders must comply with all applicable state laws and
				regulations, including but not limited to the applicable sections of the West
				Virginia Consumer Credit and Protection Act, W. Va. Code '46A-1-101 et
				seq.
6.5. Application Fee. -- Prior
				to the closing of a reverse mortgage loan, the only charge a lender may collect
				from an applicant is an application fee which must be designated as such and
				which may not be a percentage of the principal amount of the loan or amount
				financed. The fee shall be reasonably related to the services to be
				performed.
6.6. Loan to Value
				Ratio. -- The maximum loan to value ratio for any loan projected at the time of
				loan closing shall not exceed eighty percent (80%) of the anticipated value of
				the property at anticipated loan maturity or at any time prior to the
				anticipated loan maturity date. The loan to value ratio shall be calculated by
				dividing the numerator, as defined in subdivision (a) of this subsection, by
				the denominator, as defined in subdivision (b) of this subsection.
6.6.a. Numerator of the Ratio. -- The
				numerator of the loan to value ratio shall include: all principal, all accrued
				loan interest, all fees, costs and payments incurred in connection with the
				origination of the loan, including but not limited to charges for the purchase
				of annuities, the payment of real estate taxes and insurance to the extent that
				an escrow account is established to fund real estate tax and insurance
				obligations or the lender has committed to advance funds to pay for such taxes
				and insurance on the property securing the reverse mortgage and any shared
				appreciation assuming (i) no early prepayment of the reverse mortgage loan,
				(ii) any loan amounts, such as credit lines and reserve accounts, which may be
				drawn at the discretion of the mortgagor(s) or by the lender are drawn fully at
				the earliest opportunity, (iii) the current interest rate if fixed or, if
				variable, the yearly average of the base index and margin chosen by the lender
				for the eight year period preceding the loan closing, and (iv) if applicable, a
				projected appreciation or depreciation rate for home prices which is determined
				by the same factor as is used in the denominator set forth in subdivision (b)
				of this subsection.
6.6.b.
				Denominator of the Ratio. -- The denominator of the loan to value ratio shall
				be determined by increasing or decreasing the appraised value of the real
				property, as determined at loan closing by an independent certified or licensed
				appraiser, by a factor that the creditor reasonably believes will be the
				average annual increase or decrease in the value of the real property securing
				the reverse mortgage loan from the loan closing until the anticipated loan
				maturity; Provided, however, that this factor shall in no event exceed the
				average of the yearly changes in the Consumer Price Index for Shelter, as
				determined by the United States Department of Labor, for the eight years
				preceding the year in which the loan is made.
6.6.c. Term Loan. -- For a term loan, the
				anticipated loan maturity shall be the date of maturity of the loan. No term
				loan may have a maturity date of less than ten years.
6.6.d. Tenure Loan. -- For a tenure loan, the
				Commissioner of Banking may, in his or her discretion, review and approve the
				data and assumptions used to establish the anticipated loan maturity for each
				reverse mortgage loan.