Is the Oregon bill putting your reverse mortgage at risk?

Legislation concerning reverse mortgages in Oregon has sparked debate and division among legislators and stakeholders. The bill in question aims to regulate the equity claims made by lenders in exchange for lump sums against property equity. Here’s a breakdown of the key points and arguments surrounding this contentious proposal:

1. Overview of the Bill:
   The bill proposed by Sen. Deb Patterson and co-sponsored by Sen. Suzanne Weber seeks to place restrictions on the percentage of property equity lenders can claim in a reverse mortgage transaction. It aims to protect seniors from potentially exploitative home equity contracts.
2. Opposing Views:
   • The National Reverse Mortgage Lenders Association (NRMLA) opposes the bill due to its potential impact on proprietary reverse mortgages. These products currently encumber 100% of the property and operate based on specific laws within the states.
   • NRMLA argues that limiting a lender’s ability to encumber 100% of the property would make it unfeasible for proprietary products to operate in Oregon effectively.
3. Potential Implications:
   • The bill may have unintended consequences on the availability and viability of proprietary reverse mortgages within the state.
   • NRMLA suggests an alternative approach where lenders can encumber 100% of the property even when lending against a portion of it, allowing for a balanced market that aligns with property appreciation rates.
4. Supporting Testimony:
   • A constituent supporting the bill shared a story of a client who faced significant financial burden due to a home equity contract with Unison, emphasizing the need for protective legislation.
   • Concerns were raised about the exploitation of property equity with little oversight, potentially shifting financial burdens to Oregon taxpayers.
5. Regulatory Oversight:
   • NRMLA emphasizes the importance of engaging with Oregon legislators to ensure a balanced and informed approach to regulating reverse mortgage products.
   • Stakeholders, including NRMLA, are actively working to educate legislators and sponsors of the bill on the complexities and implications of the proposed legislation.

In conclusion, the debate surrounding the bill highlights the need for careful consideration of the potential impact on senior homeowners, property equity, and the availability of reverse mortgage products in Oregon. Collaborative efforts between stakeholders and legislators are essential to strike a balance that protects seniors while ensuring a sustainable market for reverse mortgages in the state. Stay informed and engaged as the discussions around this significant legislation continue.