PROVIDENCE – Gov. Donald L. Carcieri last week signed a bill intended to protect elderly homeowners from potentially unsafe reverse mortgages.
The bill – 2008 S 2598A, sponsored by Sen. David E. Bates, R-Barrington and Bristol; and 2008 H 7723A, sponsored by Rep. Richard W. Singleton, a Cumberland independent – will require that senior citizens who are shopping for reverse mortgages first receive independent counseling to make sure they make informed decisions. (READ MORE
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Rhode Island Housing Executive Director Richard H. Godfrey Jr. said in a statement that reserve mortgages – although they can be tricky – are a good way for seniors to use some of the equity in their homes.
“This legislation ensures that homeowners understand the risks and know exactly what they are agreeing to before they make a commitment,” Godfrey added. The mandated counseling will cover financial implications and possible tax consequences, his agency said.
“With the rapidly increasing cost of living, more and more seniors are likely to be looking into whether a reverse mortgage is right for them,” said AARP Rhode Island State Director Kathleen Connell. “Yet, making an uninformed decision on a reverse mortgage can have serious long-term financial consequences. Extending the protections that were once reserved just for federally insured loans to all reverse mortgage products is critical.”
Rhode Island Housing is a self-sustaining state agency that offers loans, grants and consumer education to help Rhode Islanders obtain homes they can afford. To learn more, visit www.rhodeislandhousing.org.
News and information from the R.I. Governor’s Office is available at www.governor.ri.gov.
