P.R. Laws tit. 7, § 3062
Persons or entities that recommend, process or sell reverse mortgages for direct or indirect financial gain have the legal obligation toward applicants to be honest, act in good faith, and provide fair treatment, for which reason, they shall refrain from engaging in the following practices:
(a) To give or to cause there to be given any false or deceptive representation or to omit information when processing a reverse mortgage.
(b) To originate a reverse mortgage for a wrongful purpose. A person or entity shall be deemed to have engaged in the origination of reverse mortgages for a wrongful purpose if the business transaction was closed even when there was reason to believe that such transaction would be harmful to the applicant.
(c) To carry out a reverse mortgage transaction or charge fees to a consumer when such person or entity was aware or should have been aware of the fact that such consumer did not have the legal capacity to conduct such business or when it was evident that such consumer did not have a clear understanding of the consequences of his/her decision to assume such obligation.
(d) To carry out a reverse mortgage transaction when the person or entity was aware or should have been aware of the fact that such reverse mortgage would be a means to financially exploit an elderly person, pursuant to the definition provided in the Bill of Rights for Aged Persons, §§ 341 et seq. of Title 8.
(e) To offer, recommend or provide a reverse mortgage product in violation of any of the provisions set forth in this chapter.
Before processing any reverse mortgage loan application, the financial institution must give notice to the potential applicant to apprise him/her of the importance of being well informed before taking on a reverse mortgage loan. Such notice must be set in large type (at least 14 points) and stated in a wording equal or equivalent to the following text:
DEAR REVERSE MORTGAGE LOAN APPLICANT,
A MORTGAGE IS A COMPLEX FINANCIAL TRANSACTION. AS WITH ANY MORTGAGE LOAN, IF YOU SHOULD DECIDE TO TAKE ON A REVERSE MORTGAGE, YOU SHALL SIGN LEGAL DOCUMENTS WHEREBY YOU SHALL ASSUME RESPONSIBILITIES WITH IMPLICATIONS ON YOUR FINANCES AND PROPERTY. THEREFORE, IT IS OF THE UTMOST IMPORTANCE THAT YOU UNDERSTAND THE TERMS OF THE REVERSE MORTGAGE AND ITS EFFECTS. BEFORE ENTERING INTO THIS TRANSACTION, YOU ARE REQUIRED TO RECEIVE AN INFORMATION SESSION FROM AN INDEPENDENT COUNSELOR CERTIFIED BY THE UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT. THE FINANCIAL INSTITUTION SHALL PROVIDE YOU WITH A LIST OF CERTIFIED COUNSELORS.
BE SURE TO EVALUATE ALL THE ALTERNATIVES AVAILABLE TO YOU IN ORDER TO ENSURE THAT A REVERSE MORTGAGE LOAN IS THE BEST OPTION TO ADEQUATELY MEET YOUR FINANCIAL NEEDS.
All informational material and documents on reverse mortgage loans shall be made available to applicants, both in the Spanish and the English languages. The choice of language for the documents to be handed to the borrower shall be his/her sole and exclusive prerogative, and the lending institution shall guarantee the availability of such documents, so that the borrower is able to make his/her choice.
History —July 29, 2011, No. 164, § 3, eff. 60 days after July 29, 2011.