MortgageReverse

California Reverse Mortgage Bill Amended, More Reasonable

Changes made to California’s AB 793 lighten up restrictions on how insurance brokers and agents can interact with borrowers interested in reverse mortgages.

Prior versions of the bill prohibited insurance agents from participating in the reverse mortgage process in any shape or form for the most part.

Earlier this week, Assemblyman Mike Eng (D-Monterey Park), the author of the bill, changed the bill to allow agents to work with consumers as long as they don’t receive compensation, commission, or direct incentive for providing reverse mortgage borrowers with a non-casualty insurance product that is connected to or a result of the reverse mortgage.

“Existing law provides that all insurers, brokers, agents, and others engaged in the transaction of insurance owe a prospective insured who is 65 years of age or older, a duty of honesty, good faith, and fair dealing,” said the counsel’s digest.  “This duty is in addition to any other duty,whether express or implied, that may exist.”

The bill was referred to the Committee on Insurance and is scheduled for a hearing on April 13.

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