OLR Bill Analysis
AN ACT CONCERNING REVERSE MORTGAGE TRANSACTIONS.
This bill prohibits a creditor from requiring an older spouse to be the only borrower in a reverse mortgage transaction. The bill makes an exception if the non-borrowing spouse is below the required minimum age to qualify for a reverse mortgage.
The bill defines “required minimum age” to mean the minimum age set by the federal government for a reverse mortgage transaction guaranteed by the Federal Housing Administration (age 62) or by the private company that develops a reverse mortgage for a private reverse mortgage transaction.
EFFECTIVE DATE: October 1, 2013
Reverse Mortgage Transaction
Federal regulations define a reverse mortgage transaction as a nonrecourse consumer credit obligation in which:
1. a mortgage, deed of trust, or equivalent consensual security interest securing one or more advances is created in the consumer's principal dwelling; and
2. any principal, interest, or shared appreciation or equity is due and payable (other than in the case of default) only after:
a. the consumer dies;
b. the dwelling is transferred; or
c. the consumer ceases to occupy the dwelling as a principal dwelling (12 C. F. R. § 226. 33).