CHAPTER 64
S.P. 207 - L.D. 666
An Act to Amend the Maine Consumer Credit Code to Permit Reverse Mortgages
Emergency preamble. Whereas, Acts of the Legislature do not become effective until 90 days after adjournment unless enacted as emergencies; and
Whereas, reverse mortgages are special open-end financing programs designed to let elderly persons unlock the equity in their homes without requiring repayment until those persons die or cease to live in the home as a principal residence; and
Whereas, reverse mortgages offer many elderly persons the ability to remain in their homes; and
Whereas, there are elderly persons in Maine urgently waiting to use reverse mortgages to stay in their homes; and
Whereas, federal secondary market agencies like the Federal Home Loan Mortgage Corporation and the Federal National Mortgage Association are now offering reverse mortgage programs; and
Whereas, current law prohibits Maine lenders and federal agencies from offering nationally accepted reverse mortgages in this State; and
Whereas, this legislation amends the Maine Consumer Credit Code to allow these types of reverse mortgages to be offered in this State; and
Whereas, this legislation needs to be enacted to allow Maine's elderly residents immediate access to reverse mortgages; and
Whereas, in the judgment of the Legislature, these facts create an emergency within the meaning of the Constitution of Maine and require the following legislation as immediately necessary for the preservation of the public peace, health and safety; now, therefore,
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 9-A MRSA §1-202, sub-§8, ķA, as amended by PL 1987, c. 396, §2, is further amended to read:
A. With respect to advances of additional funds on the loan or credit sale made more than 30 days after the initial advance, this exclusion shall apply applies only to advances made:
(1) Pursuant to the terms of a construction financing agreement;
(2) To protect the security or to perform the covenants of the consumer;
(3) As negative amortization of principal under the terms of the financing agreement; or
(4) From funds withheld at consummation pending the resolution of matters which that otherwise would tend to delay or prevent closing, including, without limitation, remedy of title defects or repairs to meet appraisal standards; or
(5) Pursuant to the terms of a reverse mortgage transaction, as defined in section 8-103, subsection 1, paragraph H-1, if the transaction is made pursuant to a commitment to purchase issued by, or is in a form approved for purchase by, any state or federal agency, instrumentality or government-sponsored enterprise, including, without limitation, the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation;
Emergency clause. In view of the emergency cited in the preamble, this Act takes effect when approved.
Effective March 28, 1997.
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