The governor of California signed a bill meant to protect senior citizens from unscrupulous lenders when they enter into a California reverse mortgage loan. It is true that getting a California reverse mortgage loan can prove to be very helpful, but remains a huge decision. And this bill wants to make sure that people have all the information they need before making any financial commitment.
The bill prohibits a California reverse mortgage loan lender from accepting a California reverse mortgage loan application or assessing any fees until the potential borrower has received independent counseling regarding the loan. In addition, the bill prohibits a lender from requiring a borrower to purchase an annuity as a part of the California reverse mortgage loan transaction and also requires that the reverse mortgage contract to be translated into Spanish, Chinese, Tagalog, Vietnamese or Korean if the contract was primarily negotiated in one of those languages.
An applicant for a California reverse mortgage loan is already required to go through counseling through a HUD sponsored counselor and this has been a requirement since the government took over the program almost fifteen years ago. However, as time went on, safety measures must evolve as well.
Basically a California reverse mortgage loan allows homeowners sixty-two and above to receive either monthly payments or one lump sum from the property's equity without having to sell the property or make monthly repayments. A California reverse mortgage loan typically requires no repayment for as long as residents do not move, but the California reverse mortgage loan must be repaid in full, including all interest and other charges, when the last living borrower dies, sells the home or permanently moves away. California reverse mortgage loan borrowers continue to own their homes and they remain responsible for expenses like property taxes, insurance, and repairs.
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