§506-10  Reverse mortgage loan. 
(a)  Prior to accepting an application for a reverse mortgage loan, a lender
shall refer every borrower to counseling from an organization that is a housing
counseling agency approved by the United States Department of Housing and Urban
Development, and shall receive certification from the counselor that the
borrower has received counseling.  The certificate shall be signed by the
borrower and the counselor and include the date of counseling, the name,
address, and telephone number of both the borrower and the organization
providing counseling, and shall be maintained by the holder of the reverse
mortgage throughout the term of the reverse mortgage loan.



(b)  A lender that fails to comply with the
requirements of subsection (a) shall be deemed to have engaged in an unfair
method of competition or unfair or deceptive act or practice in the conduct of
any trade or commerce within the meaning of section 480-2.



(c)  As used in this section, "reverse
mortgage loan" means a loan that:



(1)  Is a nonrecourse loan wherein the committed
principal amount is secured by a mortgage on residential property owned by the
borrower;



(2)  Is due upon sale of the property securing the
loan, or upon the death of the last surviving borrower, or upon the borrower
terminating use of the real property as a principal residence, or upon the
borrower's default;



(3)  Provides cash advances to the borrower based upon
the equity or the value in the borrower's owner-occupied principal residence;



(4)  Requires no payment of principal or interest
until the entire loan becomes due and payable; and



(5)  Is made by a lender licensed or chartered under
state or federal law.



For purposes of this section, "reverse
mortgage loan" shall not include a loan:



(1)  Insured by the United States Department of
Housing and Urban Development;



(2)  Intended for sale to the Federal National
Mortgage Association (also known as "Fannie Mae") or to the Federal
Home Loan Mortgage Corporation (also known as "Freddie Mac"); or



(3)  For which mortgage counseling is required under
other state or federal laws.



(d)  No person other than a state chartered or
licensed, or federally chartered or licensed, lender shall offer reverse
mortgage loans. [L 1999, c 50, §1; am L 2000, c 63, §1]