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 106-19-11 - Required Disclosures For Reverse Mortgage Loans

Current through Register Vol. XLI, No. 28, July 12, 2024
11.1. Disclosure Requirements. -- Prior to
				accepting an application for any loan, but in any event prior to a lender
				accepting an application fee, a lender must disclose to each loan applicant the
				following information, as is relevant to the type of loan being offered:
11.1.a. The following notice, or a similar
				notice to like effect:
YOU SHOULD CONSULT YOUR TAX, LEGAL OR FINANCIAL ADVISERS OR
				  CONSULT WITH APPROPRIATE AUTHORITIES REGARDING ENTITLEMENTS AND TAX AND ESTATE
				  PLANNING CONSEQUENCES OF A REVERSE MORTGAGE LOAN.
In addition, the lender shall furnish the applicant with a
				  statement prepared by the West Virginia Division of Banking concerning the
				  availability of independent counseling and information services;
11.1.b. The lender's toll free
				telephone number and the name of a person to whom applicants and mortgagors may
				address questions, comments or complaints;
11.1.c. A notice that the mortgagor(s) or
				applicant can submit written complaints to the West Virginia Division of
				Banking, State Capitol Complex, 1900 Kanawha Boulevard East, Building 3, Room
				311, Charleston, West Virginia, 25305-0240;
11.1.d. The events which would terminate or
				accelerate the loan and an explicit warning, if applicable, that the
				mortgagor(s) may be compelled to move out of his or her home at the expiration
				of the loan term or upon acceleration of the loan;
11.1.e. That the loan, if applicable,
				provides for the lender to receive a percentage of the future appreciated value
				of the property, i.e., "shared appreciation", what that percentage is, and the
				lender's method of calculating that amount. In addition, the lender shall
				provide both a narrative explanation and an example of the application of its
				methodology in determining the amount. This example must use as its projected
				real estate appreciation or depreciation rate for home prices the average of
				the yearly changes in the Consumer Price Index for Shelter for the South Region
				of the United States for the eight years preceding the year in which the loan
				is made;
11.1.f. That interest
				accrues from the time monies are advanced to or on behalf of the mortgagor(s)
				and whether accrued interest is added to the loan principal;
11.1.g. That the only asset of the
				mortgagor(s) which may be used by the lender to satisfy the loan is the real
				property securing the loan and any limitation thereon as may be provided for in
				subsection 6.7 of this rule. No deficiency judgment may be sought or granted in
				any civil action involving a reverse mortgage;
11.1.h. That the loan may be prepaid at any
				time without penalty. The lender shall specify how the value of the home at the
				time of prepayment will be determined and the method by which the then
				outstanding loan balance will be prepaid;
11.1.i. All fees, costs and payments to be
				paid by the mortgagor(s) and whether the application fee, loan origination fee,
				and/or broker fees are non-refundable;
11.1.j. The mortgagor(s)= right to designate
				a third party whom the lender would notify in writing of any event that could
				lead to termination of the loan and to whom the lender must furnish a copy of
				any foreclosure documents;
11.1.k.
				A description of any conditions or limitations in connection with the
				refinancing or extension of any loan, and if applicable, the mortgagor(s)=
				right to refinance or extend the loan;
11.1.l. The interest rate(s) to be charged on
				the outstanding principal under any loan and whether the rate(s) are fixed,
				variable or both. In addition, in a term loan with a fixed rate of interest,
				the lender shall disclose the total interest payable on the loan principal,
				assuming maturity of the loan at expiration of the term. In a term loan with a
				variable rate of interest, the lender shall disclose the estimated total
				interest payable on the loan principal using the yearly average of the base
				index and margin chosen by the lender for the eight year period preceding the
				loan closing and assuming the maturity of the loan at expiration of the term.
				For tenure reverse mortgage loans, the same disclosures shall be made, except
				that maturity shall be assumed to occur at the actuarial life expectancy of the
				mortgagor, or, if there is more than one mortgagor, the younger of the
				mortgagors;
11.1.m. The following
				notice, or a similar notice to like effect:
THE LENDER MAKING THIS REVERSE MORTGAGE LOANS IS IN
				  COMPLIANCE WITH THE CRITERIA ESTABLISHED BY THE COMMISSIONER OF THE WEST
				  VIRGINIA DIVISION OF BANKING FOR THE MAKING OF SUCH LOANS.;
11.1.n. If applicable, the availability of an
				annuity, whether an annuity will be required, and if there is an annuity, when
				the annuity payments will commence, who will own the annuity and the
				affiliation, if any, between the lender and the company from which the annuity
				is purchased;
11.1.o. Whether an
				escrow account will be established, for what purposes and when the escrow
				account will be terminated;
11.1.p.
				Whether a reserve fund will be established and for what purposes;
11.1.q. Whether and what type(s) of insurance
				will be required and the cost of any premiums;
11.1.r. Whether the mortgage broker or any
				entity acting in a mortgage brokerage capacity, as a general business practice,
				utilizes the services of two or fewer lenders, and if so, the name(s) of the
				lender(s);
11.1.s. If applicable,
				that the loan provides for the lender to receive "equity participation", the
				maximum total percentage obligation of the mortgagor(s) to the lender arising
				from the reverse mortgage loan, the minimum amount due at closing, if any, and
				what is included and what is excluded from these amounts. In addition, the
				lender shall provide both a narrative explanation and an example demonstrating
				equity participation; and shall, if applicable, provide an explanation and
				demonstration of anticipated shared appreciation; and
11.1.t. Any additional information as the
				lender believes appropriate, as long as the information is complete, accurate
				and not misleading.