We’ve got some good news on the reverse mortgage legislation front. Earlier this week Washington state Governor Chris Gregoire signed into law a bill which will allow non bank lenders to originate reverse mortgages.
HB 1311 was introduced earlier this year to lift the restrictions from SB 6471 which effectively banned non-bank lenders who are licensed under the states Consumer Loan Act from originating reverse mortgages. The bill also included some provisions to help regulate proprietary reverse mortgages.
According to the Reverse Mortgage Report, at the signing Gregoire stated, "Reverse mortgages are generally used by elderly homeowners to provide them with a stream of cash, but there have been situations where unscrupulous lenders have drained the equity from the properties and forced occupants into foreclosure." She added, "It is important to regulate these products."
The new law becomes effective on July 26, 2009 and it’s expected that lenders licensed under the CLA will return to the state to originate reverse mortgages.