REPORT TITLE:
Reverse Mortgages


DESCRIPTION:
Amends definition of "reverse mortgage loan" to mean a
nonrecourse loan made to the borrower where the committed
principal amount is secured by a mortgage on residential property
owned by the borrower and includes the cash advances to the
borrower based upon the equity or the value in the borrower's
owner occupied principal residence; and which requires no payment
of principal or interest until the entire loan becomes due and
payable; and which is made by a lender licensed or chartered
under state or federal law.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        2005 
HOUSE OF REPRESENTATIVES                H.B. NO.           
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO REVERSE MORTGAGES.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  Section 506-10, Hawaii Revised Statutes, is
 
 2 amended by amending subsection (c) to read as follows:
 
 3      "(c)  "Reverse mortgage loan" means a nonrecourse loan,
 
 4 which is made to [a] the borrower wherein the committed principal
 
 5 amount is secured by a mortgage on residential property owned by
 
 6 the borrower and which is due upon sale of the property securing
 
 7 the loan, or upon the death of the last surviving borrower, or
 
 8 upon the borrower terminating use of the real property as the
 
 9 principal residence, or upon the borrower's default[.]; and
 
10 which provides cash advances to the borrower based upon the
 
11 equity or the value in the borrower's owner occupied principal
 
12 residence; and which requires no payment of principal or interest
 
13 until the entire loan becomes due and payable; and which is made
 
14 by a lender licensed or chartered under state or federal law.
 
15 For purposes of this section, "reverse mortgage loan" does not
 
16 include loans:
 
17      (1)  Insured by the United States Department of Housing and
 
18           Urban Development;
 
19      (2)  Intended for sale to the Federal National Mortgage
 

 
Page 2                                                     2005 
                                     H.B. NO.           
                                                        
                                                        


 1           Association (also known as "Fannie Mae") or to the
 
 2           Federal Home Loan Mortgage Corporation (also known as
 
 3           "Freddie Mac"); or
 
 4      (3)  For which mortgage counseling is required under other
 
 5           state or federal laws."
 
 6      SECTION 2.  This Act shall apply to any transaction made
 
 7 after April 25, 1999.
 
 8      SECTION 3.  Statutory material to be repealed is bracketed.
 
 9 New statutory material is underscored.
 
10      SECTION 4.  This Act shall take effect upon its approval.
 
11 
 
12                              INTRODUCED BY:______________________