Bye Votes to Protect Elderly Homeowners Seeking a Reverse Mortgage

State Senator Beth Bye (D-West Hartford) this evening voted to protect elderly homeowners in dire financial circumstances from possible deception or bad decisions by requiring banks to counsel them on the pros and cons of reverse mortgages before signing any such agreement.

The bill passed the Senate on a 24-12 mostly party-line vote, with all Democratic state senators voting in favor of the pro-consumer bill and two-thirds of Republican senators voting against the measure.

The bill now heads to the House of Representatives for consideration.

“For a lot of seniors, their home is not just a familiar and comfortable place, or a lifetime investment—it is their last place of refuge,” Sen. Bye said. ‘It’s already a difficult decision for financially embattled seniors to apply for a reverse mortgage. They need to be sure this is the right thing to do, and to be aware of all the potential pitfalls and financial dangers. This bill ensures they get the counseling they need and deserve, instead of leaving the whole thing to chance. I don’t know why anyone would vote against this bill.”

Senate Bill 579, “An ACT CONCERNING PROTECTIONS FOR CONSUMERS APPLYING FOR REVERSE MORTGAGES,” establishes a counseling requirement that must be met before any Connecticut bank or credit union can accept a reverse annuity mortgage loan application (a reverse annuity mortgage allows elderly homeowners to convert accumulated home equity into liquid assets.)

Such counseling may include telling elderly homeowners about other options available to them, the financial implications of entering into a reverse mortgage, disclosing that a reverse mortgage may have tax consequences, affect eligibility for assistance under federal and state programs, or have an impact on the homeowner’s estate and heirs.

The bill also requires reverse mortgage lenders to store a signed certification from the borrower that the counseling requirements were met.

Nationally, reverse mortgages are sometimes marketed to older Americans with advertisements featuring reassuring celebrity spokesmen. Last year, the Consumer Financial Protection Bureau fined three reverse mortgage companies a combined $800,000 for using deceptive advertisements to sell reverse mortgages, noting that while these national firms promoted the loans as essentially risk-free, borrowers of reverse mortgages can default on their loans and lose their homes through foreclosure if they fail to make necessary payments for property taxes, insurance or home maintenance.

Supporting Our Community

CT Food Banks

Donate to a Local Food Bank

Donations of food through community food drives, from farmers and from the food industry are vital to helping the Connecticut Food Bank provide enough food to provide more than 18 million meals annually to hungry Connecticut residents.

Home Heating Assistance

Home Heating Assistance

Operation Fuel partners with local government and community-based organizations at more than 100 sites throughout Connecticut to ensure that families in need have access to year-round energy assistance.

Energy Savings

Home Energy Savings

Control your energy bills by finding generation rates that fit your needs. See what else you can do to control your cost!

Follow the Connecticut Senate Democrats:

Senate Democrats in the News:

Courant” class=

Preventing underage vaping, opioid use part of Senate Democrats’ road map for a ‘Healthy Connecticut’

February 7, 2019

A collection of bills aiming to improve the health of state residents were presented Thursday afternoon as part of Senate Democrats’ blueprint for a more “Healthy Connecticut."

Courant” class=

Marijuana, sports betting and debt-free college all part of Senate Democrats' plan to compete economically with nearby states

February 6, 2019

Senate Democrats promoted a series of bills Wednesday to legalize marijuana, establish sports betting and create debt-free college and student loan forgiveness programs, a package of proposals meant to make Connecticut more economically competitive with neighboring states and to retain young college graduates.

news junkie” class=

Marijuana, sports betting and debt-free college all part of Senate Democrats' plan to compete economically with nearby states

February 4, 2019

While insisting their pro-worker initiatives would also be friendly toward businesses, the Democrats at a press conference said voters made their feelings clear last November.

Courant” class=

7 legislative priorities for Connecticut Democrats include paid leave, early voting, minimum wage

February 6, 2019

House and Senate Democrats rolled out their seven top legislative priorities for 2019 Monday, endorsing a paid family leave program and an increase in the minimum wage.

HOME

SENATE LEADERSHIP

NEWS & MEDIA

SITE LANGUAGE

CONTACT US

Legislative Office Building
Room 3300
Hartford, CT 06106-1591

Phone: 860-240-8600
Toll-free in CT: 1-800-842-1420
FAX: 860-240-0208

For general inquiries (will not be seen by legislators): info@senatedems.ct.gov

E-newsletter Signup

FOLLOW US

Facebook icon.Twitter icon.instagram icon.flickr icon.YouTube icon.

LINKS