The purpose of this section is to authorize the Secretary to carry out a program of mortgage insurance designed-
For purposes of this section:
The Secretary may, upon application by a mortgagee, insure any home equity conversion mortgage eligible for insurance under this section and, upon such terms and conditions as the Secretary may prescribe, make commitments for the insurance of such mortgages prior to the date of their execution or disbursement to the extent that the Secretary determines such mortgages-
To be eligible for insurance under this section, a mortgage shall-
The Secretary shall require each mortgagee of a mortgage insured under this section to make available to the homeowner-
The Secretary shall provide or cause to be provided adequate counseling for the mortgagor, as described in subsection (d)(2)(B). Such counseling shall be provided by counselors that meet qualification standards and follow uniform counseling protocols. The qualification standards and counseling protocols shall be established by the Secretary within 12 months of July 30, 2008. The protocols shall require a qualified counselor to discuss with each mortgagor information which shall include-
The Secretary shall consult with consumer groups, industry representatives, representatives of counseling organizations, and other interested parties to identify alternative approaches to providing consumer information required by this subsection that may be feasible and desirable for home equity conversion mortgages insured under this section and other types of reverse mortgages. The Secretary may, in lieu of providing the consumer education required by this subsection, adopt alternative approaches to consumer education that may be developed as a result of such consultations, but only if the alternative approaches provide all of the information specified in this subsection.
The aggregate number of mortgages insured under this section may not exceed 275,000. In no case may the benefits of insurance under this section exceed the maximum dollar amount limitation established under section 1454(a)(2) of this title for a 1-family residence.
The Secretary may-
The Secretary may not insure a home equity conversion mortgage under this section unless such mortgage provides that the homeowner's obligation to satisfy the loan obligation is deferred until the homeowner's death, the sale of the home, or the occurrence of other events specified in regulations of the Secretary. For purposes of this subsection, the term "homeowner" includes the spouse of a homeowner. Section 1647(b) of title 15 and any implementing regulations issued by the Board of Governors of the Federal Reserve System shall not apply to a mortgage insured under this section.
The Secretary may, upon application by a mortgagee, insure under this subsection any mortgage given to refinance an existing home equity conversion mortgage insured under this section.
The Secretary shall, by regulation, require that the mortgagee of a mortgage insured under this subsection, provide to the mortgagor, within an appropriate time period and in a manner established in such regulations, a good faith estimate of:
The mortgagor under a mortgage insured under this subsection may waive the applicability, with respect to such mortgage, of the requirements under subsection (d)(2)(B) (relating to third party counseling), but only if-
Notwithstanding section 1709(c)(2)(A) of this title, the Secretary may reduce the amount of the single premium payment otherwise collected under such section at the time of the insurance of a mortgage refinanced and insured under this subsection. The amount of the single premium for mortgages refinanced under this subsection shall be determined by the Secretary based on the actuarial study required under paragraph (5).
Not later than 180 days after December 27, 2000, the Secretary shall conduct an actuarial analysis to determine the adequacy of the insurance premiums collected under the program under this subsection with respect to-
The Secretary may establish a limit on the origination fee that may be charged to a mortgagor under a mortgage insured under this subsection, except that such limitation shall provide that the origination fee may be fully financed with the mortgage and shall include any fees paid to correspondent mortgagees approved by the Secretary.
The Secretary may use a portion of the mortgage insurance premiums collected under the program under this section to adequately fund the counseling and disclosure activities required under subsection (f), including counseling for those homeowners who elect not to take out a home equity conversion mortgage, provided that the use of such funds is based upon accepted actuarial principles.
Notwithstanding any other provision of this section, the Secretary may insure, upon application by a mortgagee, a home equity conversion mortgage upon such terms and conditions as the Secretary may prescribe, when the home equity conversion mortgage will be used to purchase a 1- to 4-family dwelling unit, one unit of which the mortgagor will occupy as a primary residence, and to provide for any future payments to the mortgagor, based on available equity, as authorized under subsection (d)(9).
A home equity conversion mortgage insured pursuant to paragraph (1) shall involve a principal obligation that does not exceed the dollar amount limitation determined under section 1454(a)(2) of this title for a 1-family residence.
The mortgagee and any other party that participates in the origination of a mortgage to be insured under this section shall-
All parties that participate in the origination of a mortgage to be insured under this section shall be approved by the Secretary.
The mortgagor or any other party shall not be required by the mortgagee or any other party to purchase an insurance, annuity, or other similar product as a requirement or condition of eligibility for insurance under subsection (c), except for title insurance, hazard, flood, or other peril insurance, or other such products that are customary and normal under subsection (c), as determined by the Secretary.
The Secretary shall conduct a study to examine and determine appropriate consumer protections and underwriting standards to ensure that the purchase of products referred to in subsection (o) is appropriate for the consumer. In conducting such study, the Secretary shall consult with consumer advocates (including recognized experts in consumer protection), industry representatives, representatives of counseling organizations, and other interested parties.
The Secretary shall establish limits on the origination fee that may be charged to a mortgagor under a mortgage insured under this section, which limitations shall-
1 So in original. The comma probably should follow the closed quotes.
2 So in original. No subsec. (q) has been enacted.
12 U.S.C. § 1715z-20
EDITORIAL NOTES
AMENDMENTS2013-Subsec. (h)(3). Pub. L. 113-29 added par. (3). 2009-Subsec. (b)(4)(B). Pub. L. 111-22 added subpar. (B) and struck out former subpar. (B), which read as follows: "under a lease having a period of not less than 10 years to run beyond the maturity date of the mortgage." 2008-Subsec. (b)(2). Pub. L. 110-289, §2122(a)(1), inserted " 'real estate,' " after " 'mortgagor', ".Subsec. (b)(4). Pub. L. 110-289, §2122(b)(1), in introductory provisions, inserted "a first or subordinate mortgage or lien" before "on all stock", "unit" before "in a residential", and "a first mortgage or first lien" before "on a leasehold".Subsec. (b)(5). Pub. L. 110-289, §2122(b)(2), inserted "a first or subordinate lien on" before "all stock".Subsec. (d)(1). Pub. L. 110-289, §2122(a)(2), amended par. (1) generally. Prior to amendment, par. (1) read as follows: "have been made to a mortgagee approved by the Secretary as responsible and able to service the mortgage properly;".Subsec. (d)(2)(B). Pub. L. 110-289, §2122(a)(3), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: "has received adequate counseling by a third party (other than the lender) as provided in subsection (f) of this section;".Subsec. (f). Pub. L. 110-289, §2122(a)(4), substituted "Counseling services and information for mortgagors" for "Information services for mortgagors" in heading and amended introductory provisions generally. Prior to amendment, introductory provisions read as follows: "The Secretary shall provide or cause to be provided by entities other than the lender the information required in subsection (d)(2)(B) of this section. Such information shall be discussed with the mortgagor and shall include-".Subsec. (g). Pub. L. 110-289, §2122(a)(5), substituted "limitation established under section 1454(a)(2) of this title for a 1-family residence" for "established under section 1709(b)(2) of this title for 1-family residences in the area in which the dwelling subject to the mortgage under this section is located".Subsec. (i)(2)(A). Pub. L. 110-289, §2118(b)(2), substituted "Mutual Mortgage Insurance Fund" for "General Insurance Fund".Subsec. (l). Pub. L. 110-289, §2122(a)(8), amended subsec. (l) generally. Prior to amendment, subsec. (l) related to funding for counseling and consumer education and outreach. Pub. L. 110-289, §2122(a)(6), (7), redesignated subsec. (m) as (l) and struck out former subsec. (l) which related to waiver of up-front premiums for mortgages to fund long-term care insurance.Subsecs. (m) to (p). Pub. L. 110-289, §2122(a)(9), added subsecs. (m) to (p). Former subsec. (m) redesignated (l). Subsec. (r). Pub. L. 110-289, §2122(c), added subsec. (r).2006-Subsec. (g). Pub. L. 109-289 substituted "275,000" for "250,000".2005-Subsec. (g). Pub. L. 109-13 substituted "250,000" for "150,000".2000-Subsec. (b)(2). Pub. L. 106-569, §201(b)(1), struck out " 'mortgage'," before " 'mortgagee',".Subsec. (b)(4), (5). Pub. L. 106-569, §201(b)(2), added pars. (4) and (5).Subsecs. (k) to (m). Pub. L. 106-569, §201(a)(1), (c) (1), added subsecs. (k) and (l) and redesignated former subsec. (k) as (m).1998- Pub. L. 105-276, §593(d)(1), struck out "Demonstration program of" before "Insurance" in section catchline.Subsec. (a). Pub. L. 105-276, §593(d)(2), (3), struck out "demonstration" before "program" in introductory provisions, inserted "and" at end of par. (1), substituted a period for "; and" at end of par. (2), and struck out par. (3) which read as follows: "to require the evaluation of data to determine-"(A) the extent of the need and demand among elderly homeowners for insured and uninsured home equity conversion mortgages;"(B) the types of home equity conversion mortgages that best serve the needs and interests of elderly homeowners, the Federal Government, and lenders; and"(C) the appropriate scope and nature of participation by the Secretary in connection with home equity conversion mortgages for elderly homeowners." Subsec. (d)(2)(C), (D). Pub. L. 105-276, §593(e)(1)(A), added subpar. (C) and redesignated former subpar. (C) as (D). Subsec. (d)(11). Pub. L. 105-276, §593(e)(1)(B)-(D), added par. (11).Subsec. (f). Pub. L. 105-276, §593(b), inserted concluding provisions.Subsec. (g). Pub. L. 105-276, §593(a), substituted "The aggregate number of mortgages insured under this section may not exceed 150,000." for "No mortgage may be insured under this section after September 30, 2000, except pursuant to a commitment to insure issued on or before such date. The total number of mortgages insured under this section may not exceed 50,000."Subsec. (i)(1). Pub. L. 105-276, §593(d)(2), struck out "demonstration" before "program" in introductory provisions. Subsec. (k). Pub. L. 105-276, §593(d)(4), (5), redesignated subsec. (l) as (k) and struck out heading and text of former subsec. (k), which had required interim report not later than Sept. 30, 1989, on design and implementation of demonstration program of insurance of home equity conversion mortgages for elderly homeowners, preliminary evaluation of program incorporating comments and recommendations not later than Mar. 30, 1992, and updated report and evaluation biennially thereafter, including analysis of repayment of home equity conversion mortgages during report period.Subsec. (l). Pub. L. 105-276, §593(d)(5), redesignated subsec. (l) as (k). Pub. L. 105-276, §593(c), added subsec. (l).1996-Subsec. (d)(3). Pub. L. 104-120, §6(c), amended par. (3) generally. Prior to amendment, par. (3) read as follows: "be secured by a dwelling that is designed principally for a 1-family residence and is occupied by the mortgagor;".Subsec. (g). Pub. L. 104-120, §6(a), (b), substituted "2000" for "1996" and "50,000" for "30,000". Pub. L. 104-99 substituted "1996" for "1995" and "30,000" for "25,000".1992-Subsec. (g). Pub. L. 102-389 and Pub. L. 102-550, §503(c)(2), amended subsec. (g) identically, substituting "for 1-family residences in the area in which the dwelling subject to the mortgage under this section is located" for "for a 1-family residence".Subsec. (j). Pub. L. 102-550, §520, inserted at end "Section 1647(b) of title 15 and any implementing regulations issued by the Board of Governors of the Federal Reserve System shall not apply to a mortgage insured under this section."1990-Subsec. (d)(7)(A). Pub. L. 101-625, §334(c), added subpar. (A) and struck out former subpar. (A) which read as follows: "the foreclosure sale; or".Subsec. (d)(9), (10). Pub. L. 101-625, §334(b), added pars. (9) and (10).Subsec. (e)(2). Pub. L. 101-625, §334(d)(1), substituted "statement informing the homeowner that the liability of the homeowner under the mortgage is limited and" for "statement" and struck out "and" at end.Subsec. (e)(4). Pub. L. 101-625, §334(d)(2), (3), added par. (4).Subsec. (g). Pub. L. 101-508, §2106, substituted "September 30, 1995" for "September 30, 1991" and "may not exceed 25,000" for "may not exceed 2,500".1988-Subsec. (b)(3). Pub. L. 100-628, §1066(a), made technical amendment to reference to section 3802(2) of this title to correct reference to corresponding provision of original act.Subsec. (d)(3). Pub. L. 100-628, §1066(b), struck out "and that has a value not to exceed the maximum dollar amount established by the Secretary under section 1709(b)(2) of this title for a 1-family residence" after "by the mortgagor".
STATUTORY NOTES AND RELATED SUBSIDIARIES
EFFECTIVE DATE OF 2000 AMENDMENT Pub. L. 106-569, title II, §201(c)(2), Dec. 27, 2000, 114 Stat. 2951, provided that: "The provisions of section 255(l) of the National Housing Act [former 12 U.S.C. 1715z-20(l) ] (as added by paragraph (1) of this subsection) shall apply only to mortgages closed on or after April 1, 2001."
EFFECTIVE DATE OF 1998 AMENDMENT Pub. L. 105-276, title V, §593(f), Oct. 21, 1998, 112 Stat. 2655, provided that: "This section [amending this section and enacting provisions set out as a note below] shall take effect on, and the amendments made by this section are made on, and shall apply beginning upon, the date of the enactment of this Act [Oct. 21, 1998]."
EFFECTIVE DATE OF 1996 AMENDMENT Amendment by Pub. L. 104-120 to be construed to have become effective Oct. 1, 1995, see section 13(a) of Pub. L. 104-120 set out as an Effective and Termination Dates of 1996 Amendments note under section 1437d of Title 42, The Public Health and Welfare.
REGULATIONS Pub. L. 106-569, title II, §201(a)(2), Dec. 27, 2000, 114 Stat. 2949, provided that: "The Secretary shall issue any final regulations necessary to implement the amendments made by paragraph (1) of this subsection [amending this section], which shall take effect not later than the expiration of the 180-day period beginning on the date of the enactment of this Act [Dec. 27, 2000]. The regulations shall be issued after notice and opportunity for public comment in accordance with the procedure under section 553 of title 5, United States Code, applicable to substantive rules (notwithstanding subsections (a)(2), (b)(B), and (d)(3) of such section)."Pub. L. 100-242, title IV, §417(b), Feb. 5, 1988, 101 Stat. 1912, directed Secretary of Housing and Urban Development, not later than 6 months after Feb. 5, 1988, to consult with lenders, insurers, and organizations and individuals with expertise in home equity conversion in developing proposed regulations implementing this section and not later than 9 months after Feb. 5, 1988, to issue proposed regulations implementing this section.
IMPLEMENTATION OF 1998 AMENDMENT Pub. L. 105-276, title V, §593(e)(2), Oct. 21, 1998, 112 Stat. 2655, provided that:"(A) NOTICE.-The Secretary of Housing and Urban Development shall, by interim notice, implement the amendments made by paragraph (1) [amending this section] in an expeditious manner, as determined by the Secretary. Such notice shall not be effective after the date of the effectiveness of the final regulations issued under subparagraph (B) of this paragraph."(B) REGULATIONS.-The Secretary shall, not later than the expiration of the 90-day period beginning on the date of the enactment of this Act [Oct. 21, 1998], issue final regulations to implement the amendments made by paragraph (1). Such regulations shall be issued only after notice and opportunity for public comment pursuant to the provisions of section 553 of title 5, United States Code (notwithstanding subsections (a)(2) and (b)(3)(B) of such section)."
- Bureau
- The term "Bureau" means the Bureau of Consumer Financial Protection.
- State
- The term "State" means any State, territory, or possession of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, Guam, American Samoa, or the United States Virgin Islands or any federally recognized Indian tribe, as defined by the Secretary of the Interior under section 5131(a) of title 25.
- consumer
- The term "consumer" means an individual or an agent, trustee, or representative acting on behalf of an individual.
- credit
- The term "credit" means the right granted by a person to a consumer to defer payment of a debt, incur debt and defer its payment, or purchase property or services and defer payment for such purchase.