(765 ILCS 945/15)
Sec. 15. Reverse mortgage disclosures. (a) The Office of the Attorney General shall develop the content and format of an educational document providing independent consumer information regarding reverse mortgages, potential alternatives to reverse mortgages, and the availability of independent counseling services, including services provided by nonprofit agencies certified by the federal government to provide required counseling for reverse mortgages insured by the U.S. Federal Government. The document shall also include a statement that the terms of a reverse mortgage may adversely affect the applicant's eligibility to obtain a tax deferral under the Senior Citizens Real Estate Tax Deferral Act. The document shall be updated and revised as often as deemed necessary by the Office of the Attorney General.
(b) Lenders are required to provide each borrower a document regarding the availability of counseling services that shall be in at least 12-point font, containing contact information (including agency name, address, telephone number, and, if applicable, website) for agencies approved by the U.S. Department of Housing and Urban Development (HUD) to conduct reverse mortgage counseling. The agencies included on the list shall be in accordance with requirements for the Federal Housing Administration's Home Equity Conversion Mortgage Program. This document shall contain the following statement: "IMPORTANT NOTICE: Under Illinois law, reverse mortgages are non-recourse loans secured by real or homestead property. Reverse mortgages insured by the U.S. Federal Government, known as Home Equity Conversion Mortgages or HECM loans, require people considering reverse mortgages to get counseling prior to submitting a completed application for the loan from an agency approved by the U.S. Department of Housing and Urban Development (HUD) to conduct reverse mortgage counseling.
The purpose of the counseling is to help the prospective borrower understand the financial implications, alternatives to securing a reverse mortgage, borrower obligations, costs of obtaining the loan, repayment conditions, and other issues. Counseling can also be a benefit to people considering reverse mortgages not insured by the federal government. There are advantages to receiving this counseling in person, as this method allows for greater participation by the prospective borrower, and also allows the counselor to more accurately determine the prospective borrower's understanding of the program. However, counseling can also be conducted over the telephone.
In accordance with federal requirements, Illinois State law requires reverse mortgage lenders to provide potential reverse mortgage borrowers with a list, including contact information, of agencies that are approved by HUD to conduct reverse mortgage counseling. Contact information for additional approved counseling agencies is available from HUD or your lender.". (c) At the time of the initial inquiry regarding a reverse mortgage or, if not practically feasible, after the borrower makes a request to apply for a reverse mortgage, a lender shall provide to the borrower the documents described in subsections (a) and (b) of this Section.
(Source: P.A. 99-331, eff. 1-1-16.) |