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Bill

Bill

S 264

Establishes pre-loan counseling requirements and borrower rights of recission for reverse mortgage loans.

2026-2027 Regular Session Introduced by Shirley Turner

Requires reverse mortgage lenders to provide pre-loan counseling and grant borrowers a rescission period to cancel agreements, protecting senior homeowners from costly mistakes.

Introduced in the Senate, Referred to Senate Commerce Committee
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Bill Summary · S 264

Legislative bill overview

S 264 mandates that lenders provide pre-loan counseling to borrowers before finalizing reverse mortgage loans and establishes a right of rescission allowing borrowers to cancel agreements within a specified period. The bill aims to protect older homeowners by ensuring they understand reverse mortgage terms before committing and can back out if they have second thoughts.

Why is this important

Reverse mortgages are complex financial products that disproportionately affect seniors with limited financial literacy, and predatory lending has been documented in this market. Pre-counseling and rescission rights are consumer protections that could prevent costly mistakes—such as unexpected fees or borrowers not realizing they'll lose their home equity. These safeguards help vulnerable populations make informed decisions about mortgaging their primary residence.

Potential points of contention

  • Industry compliance costs: Lenders may argue that mandatory counseling requirements increase operational expenses, potentially leading to higher fees passed to borrowers or reduced market entry for smaller lenders
  • Rescission period length: Disagreement likely exists over how long borrowers should have to cancel (30, 60, or 90 days)—shorter periods favor lenders' certainty; longer ones benefit borrowers but delay loan funding
  • Counselor qualifications and standards: Debate over who qualifies as an acceptable counselor, how rigorous counseling must be, and whether federal HUD standards are sufficient or state-specific requirements are needed

Compiled from official sources — confirm details with the bill’s official record.

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