Massachusetts laws
MGL c. 167E, § 7 Reverse mortgage loans
Includes requirement for 7 day right of rescission.
MGL c. 167E, § 7A Reverse mortgage loan requirements
Before the closing of any reverse mortgage loan, the lender must receive written certification from an approved counselor that the borrower has received counseling in person, by synchronous real-time video conference or by telephone relative to the appropriateness of the loan transaction.
MGL c. 171, § 65C Credit unions: reverse mortgages
MGL c. 171, § 65C-1/2 Credit unions: reverse mortgage loan requirements
MGL c. 183, § 67 Limitations on reverse mortgages
Massachusetts regulations
209 CMR 32.33 Requirements for reverse mortgages
"Compliance with 12 CFR 1026.33 constitutes compliance with 209 CMR 32.33."
209 CMR 55.00 Reverse mortgage loans
Federal laws and regulations
Laws
12 USC § 1715z-20(j) Insurance of home equity conversion mortgages for elderly homeowners
Regulations
12 CFR 226.33 Requirements for reverse mortgages (Federal Reserve Board)
12 CFR 1026.33 Requirements for reverse mortgages (Consumer Financial Protection Bureau)
24 CFR 206.1-2.6.211 Home equity conversion mortgage insurance
Selected cases
Bennett v. Donovan, 703 F3d 582 (2013)
The U.S Court of Appeals for the District of Columbia ruled that HUD’s regulation defining the conditions under which it would insure a reverse-mortgage agreement was inconsistent with the applicable statute, and failed to protect the plaintiffs (surviving spouses of holders of reverse mortgages) from foreclosure as a result of the death of the spouse named on the mortgage note. The Court remanded the case to the District Court to determine an appropriate remedy for the problem.
James B. Nutter & Co. v. Murphy, 478 Mass. 664 (2018)
A reverse mortgage did not contain the formal language of "statutory power of sale," but only said that the company could “invoke the power of sale and other remedies permitted by applicable law." The SJC held that, given that this was a reverse mortgage, and not a traditional mortgage, "where the lender cannot hold the borrower personally liable for the debt, and where the lender’s only recourse on default is to obtain repayment through a foreclosure sale," "the only reasonable and practical interpretation of the mortgage was that it incorporated the statutory power of sale," allowing the lender to foreclose the lien.
Web sources
General info, pros and cons
Approved reverse mortgage lenders and loan programs, Mass. Division of Banks.
"The only reverse mortgage insured by the U.S. Federal Government is called a Home Equity Conversion Mortgage (HECM), and is only available through an FHA-approved lender."
Home equity conversion mortgages for seniors, US Dept. of Housing and Urban Development.
Provides links to detailed information for seniors and lenders. How the HECM Program Works has helpful information, including Borrower Requirements for the program. “You must be 62 years of age or older.”
Reverse mortgage lending for banks, credit unions, and lenders, Mass. Division of Banks.
"Information for banks, credit unions, and lenders seeking to make reverse mortgage loans in the Commonwealth."
Reverse mortgage information for consumers, Mass. Division of Banks.
Provides information on issues to consider and steps that must be taken to get a reverse mortgage loan.
Reverse mortgage loans, U.S. Consumer Financial Protection Bureau.
CFPB provides general consumer information about reverse mortgages; the agency publishes Consumer Advisories, and has put together a Discussion Guide that reviews key concepts of reverse mortgages. Download Know your rights and responsibilities.
The reverse mortgage: pros and cons, Debt.org.
A reverse mortgage loan can help some older homeowners meet financial needs, but can also jeopardize their retirement if not used carefully.
Reverse mortgages, AARP.
Discusses the advantages and disadvantages of reverse mortgages, how they work, and other options to consider.
Reverse mortgages, Federal Trade Commission.
Foreclosure
Foreclosure of reverse mortgages, Nolo.com.
Information on when a lender or servicer can foreclose on a reverse mortgage. Home Equity Conversion Mortgage (HECM) insurance “protects the lender, not the borrower. It guarantees that the lender will be repaid in full.”
Heirs and spouses
Home Equity Conversion Mortgage information regarding non-borrowing surviving spouses, U.S. Dept. of Housing and Urban Development
If I get a reverse mortgage, can I leave my home to my heirs?, Nolo.
Reverse mortgages: Foreclosure protections for nonborrowing spouses, Nolo.
Reverse mortgage rules might be able to protect you if your spouse passes away, but you aren't named as a co-borrower on the mortgage.
Print sources
Corpus juris secundum, 59 C.J.S. Mortgages § 667 Right to foreclose; effect of death of mortgagor – Reverse mortgages. Available through Document Delivery with current supplement.
Elderlaw: Advocacy for the aging, West, chapter 22, § 42-52: Reverse mortgages. 2024-2025 edition, Chapter 22 §§ 24-34 Reverse Mortgage, available through Document Delivery for most current information.
Estate planning for the aging or incapacitated client in Massachusetts, 5th ed., MCLE, loose-leaf. Chapter 15: Nationwide reverse mortgage programs.
Massachusetts elder law, 2nd ed., LexisNexis, (updated 2019). Section 14.06: Reverse mortgages.
Massachusetts Practice:
- vol. 35-36A (Consumer law), 4th ed., Thomson Reuters, 2021 with supplement, §§ 8:37, 10:66-10:69, 10:76, 28:55.
- vol. 56 (Elder law), annual, Thomson/West, § 4:20. Proceeds from reverse mortgage loans are exempt from being countable for SSI eligibility purposes.
- vol. 28 (Real estate law, with forms), Thomson Reuters, annual, § 9:28.
Mortgage lending: loan origination, preemption, and litigation, 4th ed., NCLC, 2024.
Contact for Massachusetts law about reverse mortgages
Online
| Last updated: | September 10, 2024 |
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