A Message From Corinne Calise Russo,
Director, Department of Elderly Affairs
SUBJECT: REVERSE MORTGAGES
Background: For most seniors, their home is their most significant asset. As they age and their expenses increase, they may look to their home as an important resource to allow them to borrow funds in order to pay increased living expenses and remain in their homes.
A product, called a "reverse" mortgage, offered by banks and other mortgage lenders, allows individuals who are 62 years of age and older to borrow against the equity in their home without paying off the mortgage until the home is sold. In 2006, the Department of Elderly Affairs reviewed the Rhode Island statute related to the provision of reverse mortgages and determined that there was a need for statutory changes to provide increased protections for those RI seniors who would seek a reverse mortgage. The Department, in coordination with the RI Department of Business Regulation, RI Housing and Mortgage Corporation, and the AARP of RI, drafted legislation which would add increased safeguards for Rhode Island seniors seeking a reverse mortgage. The legislation was enacted in July of 2008 and went into effect January 1, 2009.
The legislation provided that the Department of Elderly Affairs would be responsible for the following:
Preparing a statement on the advisability and availability of independent counceling and information services;
Establishing and maintaining a list of approved reverse mortgage counseling programs and making the list available to lenders and to the public;
The Director shall have the right to prescribe the form of counseling certificate required upon the completion of counseling;
The Director can add topics to be addressed during the counseling process.
The list of approved reverse mortgage counselors is available on the DEA website.
If you would like a copy of the list, please call The Point at 462-4444 or visit your local senior center.
DIRECTOR RUSSO'S STATEMENT TO ELDERS
ON THE ADVISABILITY OF REVERSE MORTGAGE COUNSELING:
"Reverse mortgages can be a wonderful resource to help you remain in your home. The reverse mortgage transaction is complex and expensive and can be confusing.
Please be sure that you ask questions during the counseling process and that you understand the answers that you receive. At the completion of the counseling process, there is a three day "cooling off" period before you can close on the mortgage. During this three day period, I would urge elders to seek the advice of a family member or other trusted individual, particularly if you have questions or concerns, to ensure that you are fully informed and that a reverse mortgage is the right decision for you!"
Corinne Calise Russo, Director