Document ID: chunk:federal_register_of_legislation:F2024C00882:reg:28lc:p1
Version: federal_register_of_legislation:F2024C00882
Segment Type: reg
Provision Reference: reg 28LC (pt 1/2)
Character Range: 192670–195505

28LC  Reverse mortgages—presumption of unsuitability of credit contract if certain loan to value ratios exist
 (1) This regulation:
 (a) is made for the purposes of the following provisions of the Act:
 (i) paragraph 164(d);
 (ii) paragraph 118(2)(c) (when the credit contract must be assessed as unsuitable—entering the contract or increasing the credit limit), as modified by subregulation (2);
 (iii) paragraph 123(2)(c) (prohibition on suggesting or assisting consumers to enter, or increase the credit limit under, unsuitable credit contracts), as modified by subregulation (3);
 (iv) paragraph 131(2)(c) (when credit contract must be assessed as unsuitable), as modified by subregulation (4);
 (v) paragraph 133(2)(c) (prohibition on entering, or increasing the credit limit of, unsuitable credit contracts), as modified by subregulation (5); and
 (b) sets out circumstances in which a credit contract is unsuitable.

Modifications of Act
 (2) For the purposes of paragraph 164(d) of the Act, the provisions to which Part 3‑7 of the Act applies apply as if paragraph 118(2)(c) of the Act were varied to read:
 "(c) if the regulations prescribe circumstances in which a credit contract is:
 (i) unsuitable; or
 (ii) unsuitable unless the contrary is proved;
  those circumstances will apply to the contract;".
 (3) For the purposes of paragraph 164(d) of the Act, the provisions to which Part 3‑7 of the Act applies apply as if paragraph 123(2)(c) of the Act were varied to read:
 "(c) if the regulations prescribe circumstances in which a credit contract is:
 (i) unsuitable; or
 (ii) unsuitable unless the contrary is proved;
  those circumstances will apply to the contract;".
 (4) For the purposes of paragraph 164(d) of the Act, the provisions to which Part 3‑7 of the Act applies apply as if paragraph 131(2)(c) of the Act were varied to read:
 "(c) if the regulations prescribe circumstances in which a credit contract is:
 (i) unsuitable; or
 (ii) unsuitable unless the contrary is proved;
  those circumstances will apply to the contract;".
 (5) For the purposes of paragraph 164(d) of the Act, the provisions to which Part 3‑7 of the Act applies apply as if paragraph 133(2)(c) of the Act were varied to read:
 "(c) if the regulations prescribe circumstances in which a credit contract is:
 (i) unsuitable; or
 (ii) unsuitable unless the contrary is proved;
  those circumstances will apply to the contract;".

Circumstances
 (6) A circumstance in which a credit contract is unsuitable unless the contrary is proved is that:
 (a) the credit contract is part of an arrangement that is a reverse mortgage; and
 (b) at the time the credit contract is entered into, the youngest borrower under the reverse mortgage is 55 or younger; and
 (c) the loan to value ratio of the mortgage is higher than 15%.
 (7) A circumstance in